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General Motors to invest an extra $1 billion in US manufacturing

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General Motors says it will invest an additional $1 billion into its manufacturing operations in the US, adding to the $2.9 billion of investment it announced last year. 

And in a what may have been an extra comment aimed at President-elect Donald Trump, GM says it has invested a total of $21 billion in its US manufacturing operations since 2009.

Like virtually all other automakers and large manufacturing companies, such as Apple, GM has been the target of some criticism from Trump, who wants to fulfil his campaign promise to bring back manufacturing jobs to the US. 

gm mary barra
General Motors CEO Mary Barra

Trump has directly addressed companies like GM, warning them that any products they make abroad will be subject to punitive import taxes when being brought into the giant US auto market.

Now, GM seems to have responded with this $1 billion investment, which the automaker says will create 7,000 new jobs.

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 US jobs.

GM chairman and CEO Mary Barra says: “As the US 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.

“The US 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.”

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 US − 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 US economy over that period.

At the same time, GM reduced more than 15,000 positions outside the US, 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 US-based model.

Barra says: “We will continue our commitment to driving a more efficient business, as shown by our insourcing of more than 6,000 IT jobs that were formerly outside the US, 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 US 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 US manufacturing sites, which the company says is 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 says 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 US.