General Motors Company (GM - Free Report) plans to open a new supplier park at its already existing Arlington assembly plant in Texas. This new facility will support future vehicle production and recruit up to 1,250 employees. Per management, the plant will improve logistic efficiency and coordination, and create employment opportunities.
Of the total employee count, over 850 will be newly hired, thus indirectly creating job opportunities in Arlington, TX. These new jobs are in addition to the already promised 7,000 General Motors jobs and $1 billion investments in the U.S., announced earlier this year.
The new supplier park in Arlington will comprise a sprawling area of more than 1.2 million square feet, combined with two industrial manufacturing and warehouse buildings. Per the company, out of the 850 newly created jobs, 600 will replace the work previously done outside the U.S. Arlington plant is operating since 1954. The new supplier park is expected to start operation in 2018. It forms a part of the company’s strategy to create supplier parks adjacent to the U.S. manufacturing sites.
The addition of the new park is in sync with its strategy to build supplier park in close proximity to its manufacturing sites, such as Northpoint at General Motors Fairfax Assembly Plant in Kansas, Wentzville Assembly Plant in Missouri, Bowling Green Assembly in Kentucky and Fort Wayne Assembly Plant in Indiana. The company believes that supplier parks located near assembly plants will help them curb costs by lower transportation rates, higher quality communications and continuous improvement activities.
General Motors is focused on investing in innovative technologies and vehicles which should provide sustained growth while maximizing the shareholder value.
In Nov 2016, General Motors announced that it would invest more than $900 million in three manufacturing plants in the U.S. In Dec 2016, the company planned to invest around $552 million in the U.S., mainly for upgrading manufacturing facilities in Tonawanda, Lockport and Rochester in New York and Parma Metal center in Ohio.
In Jan 2017, General Motors declared to spend another $1 billion on the U.S. factories. Since 2009, the company has put in around $21 billion in its U.S. operations.
General Motors shares have underperformed the Zacks categorized Automotive-Domestic industry in the last one month. The company’s shares have gained 4.2%, while the industry has grown 7.8%.
Zacks Rank & Key Picks
General Motors currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the auto space are Fiat Chrysler Automobiles N.V. (FCAU - Free Report) , Fox Factory Holding Corp (FOXF - Free Report) and Dana Incorporated (DAN - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fiat has an expected long-term growth rate of 22.4%.
Fox Factory has an expected long-term growth rate of around 15.6%.
The expected long-term growth rate for Dana is pegged at 3%.
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