LANSING, Mich. — General Motors Co. and Chrysler Group LLC announced plans to invest millions of dollars in U.S. plants Thursday to build new small cars.
GM said it will spend $190 million to build a new Cadillac at its Lansing Grand River plant. GM said it will add 600 jobs and a second shift to the plant, which has 1,100 workers and already is building the Cadillac CTS and STS sedans. The jobs will be filled by laid-off GM workers.
The car will be the smallest in Cadillac’s lineup and will compete with the Mercedes-Benz C-Class and BMW 3-Series, GM chief executive Dan Akerson told employees at the plant, which is about 80 miles west of Detroit.
“I’ve seen it, and I will tell you, if I was at BMW, I wouldn’t be very happy,” he said.
GM didn’t reveal the name of the vehicle or say when it will go on sale.
Chrysler said it will invest $600 million in its Belvidere, Ill., assembly plant to build cars starting in 2012. The investment won’t create any jobs, but the company said it will retain the 2,349 jobs already at the assembly plant and a nearby parts-stamping plant.
Company spokesman Jodi Tinson would not say what new vehicle the plant will build. But it’s likely to be a replacement for the factory’s current products, Dodge Caliber and Jeep Compass and Patriot compact sport utility vehicles.
Chrysler Chief Executive Officer Sergio Marchionne has said the company intends to build a 40-mpg small car for the U.S., in addition to the Fiat 500, which will go on sale in December.
The Belvidere complex is about 70 miles northwest of Chicago.
Meantime, General Motors says it will cut its debt and pension obligations by $11 billion.
The announcement comes as GM prepares for an initial public sale of company stock.
GM says it will reduce its obligations by buying $2.1 billion worth of preferred stock from the U.S. government. The automaker says it will buy the preferred shares after the initial public offering, which is expected next month.
The U.S. government got a 61 percent ownership stake in GM, plus the preferred stock, in exchange for a $50 billion bailout to get the company through bankruptcy protection last year.
GM will also pay down $2.8 billion owed to a union retiree health-care trust fund and pump roughly $6 billion in stock and cash into its underfunded pension plan.
Business, Pages 29 on 10/29/2010