General Motors Co. (GM) announced that it will invest $49 million for tooling and equipment of its powertrain plant in Bedford, Massachusetts. The investment will support production of 8-speed transmission and a small engine in the future at the plant. It will create or retain 91 jobs.
Bedford plant was opened in 1942 and is one of the leading aluminum die casting facilities in the world. It uses an aluminum die cast process to manufacture transmission casings and converter housings for the new fuel-efficient six speed transmissions. It currently employs 405 hourly and salaried people.
Both the production of 8-speed transmission and the small gasoline engine in displacements from 1.0 liters to 1.5 liters will improve fuel economy in GM vehicles.
GM’s investment in Bedford plant is a part of its $2 billion investment plan at 17 assembly and components plants in 8 states of U.S. Through the $2 billion investment plan, the company aims at creating or preserving more than 4,000 hourly and salaried jobs at the plants.
Last month, GM announced to invest $131 million in its Bowling Green Assembly Plant in Kentucky as a part of the same plan. Through the investment, GM will upgrade the plant and add 250 jobs.
Apart from the above mentioned plants, facilities that received investment under the same plan include Arlington, Texas; Toledo, Ohio; Bay City, Detroit; Flint, Lansing and Warren, Michigan.
GM, a Zacks #3 Rank (Hold) stock, earned a profit of $3.2 billion or $1.77 per share in the first quarter of 2011 that increased more than threefold from $865 million or 55 cents per share a year ago. However, more than half of the profits have been contributed by one-time gain from sales of the company’s ownership interest in Delphi Automotive LLP ($1.6 billion) and Ally Financial Inc. ($300 million).
Excluding these gains and a $0.4 billion goodwill impairment charge at GM Europe (GME) resulting from a change in accounting standards and charges of $0.1 billion at GM International Operations (GMIO) related to revised tax regulations affecting the company’s India joint venture, GM’s profit stood at $1.7 billion or 95 cents per share, topping the Zacks Consensus Estimate by a penny. It was also GM's biggest profit in 11 years since earning $1.8 billion in the second quarter of 2000.
Revenues during the quarter went up 15% to $36.2 billion on sales of 2.2 million vehicles globally, up 11% from the prior year. It exceeded the Zacks Consensus Estimate of $35.2 billion.
Strong demand for its fuel-efficient lineups including Chevrolet Cruze compact and Equinox crossover helped boost the company’s sales. The automaker occupied a market share of 11.5% during the quarter, up from 11.1% in the year-ago quarter.
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