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Union Pacific Railroad's General Motors Corp. contract — under which the Class I handles all the automaker's western vehicle traffic — has led to a capacity-increasing project for Indiana Harbor Belt Railroad Co. (IHB).

The 320-mile short line plans to spend $2.4 million expanding its Gibson Yard in Hammond, Ind., to accommodate additional GM finished-vehicle traffic; UP plans to daily build six trains at IHB's yard, as well as trains to westerly carry traffic received from eastern carriers.

The project — designed to boost the yard's daily capacity by 100 cars and reduce terminal dwell time — includes extending the existing yard lead and constructing 14,000 feet of yard track.

IHB, a switching railroad that operates Indiana and Illinois facilities, expects to start work this fall and have the expanded facility available sometime in winter, said IHB Chief Engineer Nick Montagano in a prepared statement.