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Posted on Wed, Apr. 28, 2004

Arlington weighing size of GM tax break
By Sean Wood
Star-Telegram Staff Writer

ARLINGTON - The Arlington City Council met in executive session Tuesday to talk about how much of an incentive it should offer General Motors.

The company is considering investing more than $160 million in the Arlington assembly plant for production of the next generation of sport utility vehicles.

GM wants a 10-year break on real estate and business personal property taxes, but the amount of the break is still up for debate. According to city guidelines, the size of the abatement is negotiable.

Council members would not discuss the project except to say it was a topic of discussion in executive session. The Council's Fiscal Stewardship committee also talked about it in executive session.

GM spokesman Dan Flores in Detroit said the company has to cut costs wherever it can, and city tax breaks are one place it looks.

"There are costs that GM faces that our competitors don't face," Flores said. "We have two and a half retirees for every active employee. Because of those legacy obligations, we have to be very aggressive in looking for other areas where we can cut costs."

The council is expected to vote on the tax breaks at a May 11 meeting.

Flores said the company is considering expansion of the Arlington plant, which makes the Chevrolet Suburban and Tahoe, GMC Yukon, Yukon XL and Cadillac Escalade. GM spent more than $750 million on the plant in the 1990s when it was switched from car to truck production.

If the Arlington plant gets the green light from GM, work could start in June. Plans call for a 27,000-square-foot expansion of the body shop, which was built in 2000.

The addition would be scheduled for completion by December. Work would then start on retooling the body shop. A prototype would be built by August 2005, and the conversion would be complete by July 2006.

Meanwhile, GM still needs to hammer out a local labor agreement with about 2,500 members of United Auto Workers Local 276. They continue to work under an agreement that took effect in October 1999 and expired in September.

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