DETROIT, Mich. – Under attack from President-elect Donald Trump for its investment in Mexican plants, General Motors announced plans Tuesday to invest at least $1 billion in U.S. factories and committed to creating or retaining about 7,000 U.S. jobs in the coming years.
The company will move 450 jobs from GM supplier plants in Mexico back to the U.S., and will keep another 1,500 factory jobs in the U.S. that were at risk of moving to Mexico. In addition, GM is adding 5,000 jobs to its finance and technology operations.
“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 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.”
According to the GM’s statement, the new investments cover multiple new vehicle, advanced technology and component projects. A combination of 1,500 new and retained jobs are tied to the new investments. Details of individual projects will be announced throughout the year.
The company also announced it will begin work on insourcing axle production for its next generation full-size pickup trucks, including work previously done in Mexico, to operations in Michigan, creating 450 U.S. jobs.
Earlier Tuesday, Walmart said it would add 10,000 U.S. jobs this year. Last week, Amazon, a frequent target of Trump criticism, announced it add 100,000 U.S. jobs.
GM’s announcement is part of the company’s increased focus on overall efficiency over the last four years. With a strategy to streamline and simplify its operations and grow its business, GM has created 25,000 jobs in the U.S. − approximately 19,000 engineering, IT and professional jobs and 6,000 hourly manufacturing jobs – and added nearly $3 billion in annual wages and benefits to the U.S. economy over that period. At the same time, GM reduced more than 15,000 positions outside the U.S., bringing most of those jobs to America. During that period, the company moved from 90 percent of its IT work being outsourced to an insourced U.S.-based model.
“We will continue our commitment to driving a more efficient business,” said Barra, “as shown by our insourcing of more than 6,000 IT jobs that were formerly outside the U.S., streamlining our engineering operations from seven to three, with the core engineering center being in Warren, Michigan, and building on our momentum at GM Financial and in advanced technologies. These moves, and others, are expected to result in more than 5,000 new jobs in the U.S. over the next few years.”
GM has also been facilitating its supplier base to do the same. The company has been executing a strategy to create supplier parks adjacent to its U.S. manufacturing sites (already accomplished at GM’s Fairfax Assembly Plant in Kansas, Spring Hill Assembly Plant in Tennessee, Fort Wayne Assembly Plant in Indiana, and Lordstown Assembly Plant in Ohio), and will continue to expand this effort. Supplier parks locating near assembly plants result in significant savings from reduced transportation costs, higher quality communications and continuous improvement activities as suppliers are located closer to the final assembly location.
In addition, GM is confirming that another supplier has committed to make components for GM’s next-generation full size pick-up trucks in Michigan, moving 100 supplier jobs from Mexico to the U.S.
Ford scrapped plans for a $1.6 billion plant in Mexico two weeks ago and said it would expand a Michigan plant, adding 700 jobs there. Lockheed Martin, which, like Ford, had been criticized by Trump, announced Friday it would add 1,800 jobs to its F-35 fighter program. And Sprint said it is bringing 5,000 jobs back to the US.
Trump has threatened to impose a 35% tax on cars imported from plants in Mexico. At his first post-election press conference last week, Trump predicted GM would be making this kind of U.S. investment announcement.
“I hope that General Motors will be following, and I think they will be,” he said. “I think a lot of people will be following. I think a lot of industries are going to be coming back.”
The company recently announced layoffs at three U.S. plants, eliminating three shifts and about 3,300 jobs, because of slowing sales. But in its 2015 labor deal with the United Auto Workers union, GM committed to $1.9 billion in additional investment in U.S. plants as a form of job protection for the union’s membership. And even with the recent layoffs, the company has added 25,000 jobs to its U.S. work force since its 2009 bankruptcy and federal bailout, despite investment in Mexico and China plants.
