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The $55.7 million investment that General Motors Co. announced Thursday will put the final pieces in place to enable the Toledo Transmission Plant to start building a high-tech, eight-speed transmission that figures to become an important part of GM’s powertrain offerings in the future.
With the additional $55.7 million, GM will have put about $260 million into the plant since 2011 to prepare it for the eight-speed transmission.
GM has been working to prepare the plant for the new product while continuing to crank out nearly 5,000 transmissions a day. Officials said Thursday the latest investment will allow the plant to get the last of the equipment needed to build the eight-speed.
“We’re ready. The building’s ready, the facility’s ready,” said Dale Grech, acting plant manager in Toledo. “Once the equipment starts coming in, and we start getting everything set up, we’ll be ready to go.”
GM announced investments in three other Midwest factories:
● $215 million for the Flint (Mich.) Engine Operations.
● $31.7 million for a powertrain plant in Bay City, Mich.
● $29.4 million for a metal castings plant in Bedford, Ind.
None of the investments will produce any jobs right away.
GM hasn’t announced when production will start in Toledo. Officials say it depends somewhat on other product launches, as GM intends to introduce certain vehicles with that specific transmission.
The company said the eight-speed will be used in “numerous” GM vehicles by the end of 2016.
GM officials announced last month that the next-generation 2014 Cadillac CTS would be the first GM product with an eight-speed transmission. That car at first will use an eight-speed that GM is acquiring from a separate supplier, though it’s likely the CTS will get Toledo-built transmissions once they are available.
Workers will build the eight-speed on the same line as the rear-wheel drive six-speed transmission the plant already builds. To do that, much of the machinery has been updated, and the line soon will be extended into a 20,000-square-foot space inside the now-empty plant.
Bob Widmer, GM’s launch manager for the new transmission, said the addition won’t affect capacity for six-speed transmissions, but will give the company more flexibility to quickly adapt to market conditions.
“If demand goes down on six-speed, we can increase on eight-speed, or vice versa,” Mr. Widmer said. “We’ve got the flexibility to do both.”
How many of each transmission the plant will produce depends on those market demands, though Mr. Grech said the plant’s production capacity for rear-wheel drive transmissions will increase.
That’s all good news for workers in Toledo.
“It means continued job security for us,” said Ray Wood, president of United Auto Workers Local 14, which represents hourly workers at the plant. “We always reflect back to where we were a few years ago, and we don’t ever want to take our eyes off that.”
Salaried and hourly employment at the plant fell from nearly 3,500 people in 2005 to about 900 at the end of 2009. That’s rebounded to about 1,900 people.
No new jobs are expected as a result of Thursday’s investment announcement, though plant officials say they could add jobs if demand for the eight-speed is high.
Additional gear ratios allow vehicles to operate more efficiently, delivering higher fuel economy. They also can offer a better driving dynamic for high performance vehicles, such as the CTS.
Several manufacturers already offer vehicles with eight-speed transmissions, including Chrysler Group LLC, Hyundai, and BMW AG.
Toledo will be the first plant to build GM’s version of an eight-speed.
Though full-scale production is a ways off, some eight-speeds are being built by hand in Toledo for various engineering tests and to make sure the transmissions go together in manufacturing the way the company’s designers envisioned.
“It provides us the opportunity to help them design it early on,” Mr. Widmer said.
Contact Tyrel Linkhorn at email@example.com or 419-724-6134.