General Motors Co (GM), facing pressure from US president-elect Donald Trump, is to invest US$1 billion in US plants over several years, a person familiar with the matter said.
The largest US automaker expects to create or retain 1,000 jobs at several existing facilities, said the person, who asked not to be named ahead of an announcement that was expected later yesterday.
The investment announcement, which is being accelerated amid pressure from the president-elect, are related to building products that were in the works and approved before Trump won the election in November last year, the person said.
GM becomes just the latest automaker to announce US factory investments in response to Trump. Ford Motor Co and Fiat Chrysler Automobiles NV have each said this month they will spend on US plants after Trump threatened for months to slap Mexico-built vehicles with a 35 percent import tax.
Automakers are eager to cooperate with the incoming administration as they prepare to ask for favors, including less-stringent fuel economy rules and lower corporate taxes.
“This is the normal course of business,” said Maryann Keller, an auto industry consultant in Stamford, Connecticut. “All they’re doing is announcing investments that they would have made anyway.”
Less than two minutes into his first formal press conference since the election, Trump highlighted Ford’s decision to cancel a US$1.6 billion factory in Mexico and expand an existing plant in Michigan.
Fiat Chrysler committed US$1 billion toward making three new Jeeps in the US and enabling a Michigan facility to build a Ram pickup now produced in Mexico.
“I hope that General Motors will be following and I think they will be,” Trump said on Wednesday last week at Trump Tower in Manhattan. “I think a lot of people will be following. I think a lot of industries are going to be coming back.”
GM budgets about US$9 billion a year toward capital expenditures, including for new models and factory upgrades. The automaker announced at least US$2.9 billion in US investments for future production of engines and vehicles last year.
Trump targeted GM earlier this month for importing a small number of Chevrolet Cruze hatchback models from Mexico to the US.
The automaker made separate announcements last year that it would permanently cut 3,300 jobs at three passenger-car plants and temporarily slow production at five factories in states including Michigan and Ohio, due to slack demand.
GM also continues to invest in Mexico. In late 2014, it said it would spend US$5 billion on new plants in the country by next year, creating 5,600 jobs. Facilities making the Chevrolet Equinox and GMC Terrain account for about US$1 billion of those outlays.
The industry has been in Trump’s cross hairs. He has threatened Toyota Motor Corp and BMW AG with tariffs on their Mexican-made cars.
BMW sees “no reason” to change its plans in Mexico, Peter Schwarzenbauer, who heads BMW’s Mini and Rolls-Royce brands, told reporters in Munich.
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