A General Motors Co (GM) manufacturing plant that was set to close would instead get a new life producing electric trucks and sports utility vehicles (SUVs), the company announced on Monday
The US auto giant in 2018 announced a massive restructuring, which would have slashed 15 percent of its workforce to save US$6 billion, a move criticized by US President Donald Trump as “nasty” because it would have required shuttering several manufacturing facilities in North America.
The Detroit-Hamtramck assembly plant in Michigan was scheduled to close as part of that plan, but would now get an overhaul and start producing two new electric vehicles (EVs) starting late next year: a pickup truck and the Cruise Origin autonomous shuttle vehicle, the company announced.
Photo: Bloomberg
“Our electric vehicle plan is unmatched in the industry,” GM president Mark Reuss said at a news conference in Detroit. “Hamtramck will be GM’s first dedicated all EV assembly plant.”
GM is investing US$2.2 billion in the plant, along with US$800 million in projects related to the new model, the company said in a statement.
The new configuration will employ more than 2,200 people when it is fully operational at the end of 2022, after the construction of a new paint shop and the addition of modern assembly line equipment, the company said.
The plant, which opened in 1985 and employs about 900 workers, would be idled for several months beginning at the end of next month as the renovations begin, with most workers transferred to other GM plants.
GM’s decision to keep Hamtramck open came after the company announced in 2017 it would launch 20 EV models by 2023 as part of a push for an “all-electric” fleet amid demands from governments worldwide for greater automobile fuel efficiency.
However, the company has also faced political pressure, including from Trump, who has not shied away from publicly berating companies to get them to commit to investing more and creating more US jobs.
The news on the plant would be especially welcome as Trump battles for re-election in November, when he hopes to repeat his upset 2016 election victory in Michigan, which is seen as crucial to him winning a second term.
Michigan politicians and labor unions also pushed against the plant’s closure, with Detroit Mayor Mike Duggan calling GM chief executive Mary Barra to plead the facility’s case.
“I did ask her: ‘Why can’t GM build new vehicles here?’” Barra said, adding that building the factory required more than 4,000 residents to move elsewhere.
Hampered by trade disputes, US manufacturing is in the midst of a recession, with production dropping 1.3 percent in the final months of last year, compared to a year prior, according to the US Federal Reserve.
General Motors reported a decline in US auto sales at the end of the fourth quarter, reflecting the lingering effect of a bruising 40-day strike by the United Auto Workers (UAW) that dented its vehicle inventory.
The labor union cheered the news that the plant would remain open.
“Over 2,200 jobs and a new technology product will deliver job security and a bright economic future for UAW members for decades to come at Hamtramck,” UAW vice president Terry Dittes said in a statement.
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