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General Motors confirmed Tuesday it would invest another $1 billion in its U.S. manufacturing operations, which will lead to the creation or retention of 1,500 jobs. The company will also add another 5,000 jobs "over the next few years" in finance and advanced technology.
In addition, around 450 jobs will be returned to the U.S. as GM transfers back production of axles from a plant in Mexico.
“As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners,” said GM Chairman and CEO Mary Barra. “The U.S. is our home market and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.”
Decision Likely Dates Back to 2014
But several GM officials stressed that the latest moves were in the works for months and, in some cases several years, and were not a reaction to criticism by president-elect Donald Trump who, earlier this month, had threatened to impose “a big border tax” on GM for importing the hatchback version of its compact Chevrolet Cruze model from Mexico.
During an appearance at the North American International Auto Show in Detroit last week, GM Chairman and CEO Mary Barra said the automaker would not alter its global manufacturing strategy to comply with political pressure, and GM General Counsel Craig Glidden this week echoed the position in an interview with the Wall Street Journal.
Investment decisions of this magnitude and involving changes to manufacturing operations are typically the result of several years of study and require months of consideration by a company’s board of directors, noted David Cole, director-emeritus of the Center for Automotive Research, in Ann Arbor, Michigan, in a discussion this week. That would suggest that the latest GM investment project began as far back as 2014.
The automaker, in a prepared statement, noted that it has aggressively expanded its job and manufacturing base since emerging from Chapter 11 in 2010. Prior to the latest announcement, it had already invested $21 billion in the U.S., creating about 25,000 in the process, 6,000 of those in manufacturing.
The automaker is not disclosing specifics about the new manufacturing program, beyond the basics. It says it will outline individual details later this year, but the $1 billion investment is expected to involve several different U.S. plants.
Bringing Jobs Back
As for the 450 jobs returning from Mexico, that involves axles that will be upgraded for use on GM’s next-generation pickup trucks. A key supplier, GM said, was also moving pickup operations back from Mexico, creating another 100 U.S. jobs.
“We will continue our commitment to driving a more efficient business,” said Barra, noting how GM has already consolidated a number of operations from around the world.
Over the last several years, for example, it returned about 6,000 IT jobs to the U.S., and consolidated seven engineering centers into three, with a significant focus on the General Motors Technical Center in the Detroit suburb of Warren. New projects in finance and advanced technologies, the CEO stated, “are expected to result in more than 5,000 new jobs in the U.S. over the next few years.”
The issue of auto industry investments in the U.S. became politicized with Donald Trump’s entry into the 2016 political campaign. He quickly took aim at Ford for importing vehicles from Mexico, amping up his criticism last April when the nation’s second-largest automaker revealed plans to move all of its small car production to a new factory south of the border.
Early this month, Ford CEO Mark Fields announced the automaker was scrubbing the $1.6 billion plant, triggering self-congratulatory tweeting by Trump, even though Ford officials publicly noted they were still planning to move small car production to Mexico. They just decided to save cash by merging it into an existing, underutilized Mexican plant.
The president-elect also offered praise for Fiat Chrysler when it announced new U.S. investments in several Midwest factories — despite the fact that it had previously revealed the outline for that move which shifts production at two plants from slow-selling passenger cars to high-demand light trucks.
GM's CEO Is One of Trump's Advisers
Trump’s attack on GM came as something of a surprise considering he had previously appointed the maker’s Chairman and CEO Mary Barra to his new economic advisory council. But he issued a tweet on January 3 warning, “Make in U.S.A. or pay big border tax,” a reference to the Chevy Cruze. In fact, only a few thousand of those hatchbacks are imported from Mexico. The bulk of the Cruze volume — all of the compact sedan versions — are produced in the U.S.
Nonetheless, following news of the FCA and Ford moves, Trump declared at his news conference last week, “General Motors will be following, and I think they will be.”
For her part, Barra told reporters at the North American International Auto Show last week that GM will not alter its manufacturing plans to please the new president. It will continue to make investments that reflect its overall global strategy. That will include projects in the U.S. and abroad, including possible future efforts in Mexico.