General Motors Company (GM)’s Huge Investment In a Big U.S. Overhaul

But the money to do all that isn’t coming from the U.S., GM says. And it definitely isn’t coming from the $49.5 billion bailout loan that the U.S. Treasury gave GM in 2009.

Ford Motor Company (NYSE:F) is also investing big in China
Bingol’s letter says that GM’s operations in China are “self-funding”. In other words, the $11 billion in capital that GM plans to invest in China between now and 2016 will come out of money earned by GM’s joint ventures – in China.

And GM is far from the only global automaker that has committed big bucks to expand in China. Ford Motor Company (NYSE:F) is spending $5 billion on a series of new factories in China to support its own aggressive expansion in the region.

VW is also planning a massive push to expand in China, with its own massive investment in a series of new factories. That’s part of VW’s global effort to overtake GM and Toyota Motor Corporation (ADR) (NYSE:TM) and become the world’s largest automaker by 2018.

General Motors Company (NYSE:GM), meanwhile, is determined to hold on to its No. 1 position in both of the world’s largest auto markets – China and the U.S. But it’s even more determined to close the sizable profit gap between it and its chief rivals: VW’s earnings before taxes last year were nearly twice GM’s.

That means making the most of its opportunities around the world. And that’s why GM is investing big bucks, both here and abroad.

The article GM Plans a Big Investment in America originally appeared on Fool.com and is written by John Rosevear.

Motley Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.