GM to Invest Additional $1 Billion in U.S. Manufacturing
Ever heard the term “Insourcing?”by Mark McNabb, on
General Motors has announced an investment of $1 billion into its U.S.-based manufacturing powerhouse spread across multiple vehicles, advanced technologies, and component projects. The sizable investment is expected to crease 1,500 new and retained jobs, while insourcing manufacturing that is currently taking place in Mexico. Chief among the insourced components with be pickup truck axle assemblies ready for the next-generation Silverado and Sierra trucks.
Mary Barra, General Motor’s Chairman and CEO, said, “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. 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.”
The billion-dollar investment is only the latest in sizable investments and job creation made by GM. In the last four years, GM says it has created 25,000 jobs inside the U.S., which along with raises, account for nearly $3 billion in additional annual wages and benefits to its U.S. workforce. Broken down, those jobs include 19,000 engineering, IT, and professional positions, along with some 6,000 hourly manufacturing jobs. Additionally, GM says it has insourced 90 percent of its IT work formerly being outsourced outside the U.S.
GM is also working with its independent parts suppliers in creating industrial park complexes near its main manufacturing and assembly plants. This self-contained parks allow for ultra-short-distance transportation of components from third party suppliers to GM’s assembly plants. Ultimately, this cuts down on cost and streamlines the assembly process.
All told, it seems General Motors is diligently working to reinvigorate its U.S. operations, both in blue- and white-collar positions.
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Why It Matters
Love or hate him, it seems President Trump’s distain for the North American Federal Trade Agreement seems to be shaking up the trend of outsourcing U.S. manufacturing and IT work to Canada and Mexico. Trump’s proposal of reworking the NAFTA deal and implementing tariffs on “foreign-built” products are making U.S. companies, including automakers, drastically reconsider and reevaluate current business practices.
While it’s yet unknown what Trump will actually do about the NAFTA deal, automakers aren’t risking the threat of double-digit percentage tariffs. Such a tax would either push product prices out of consumers’ reach, or drastically cut (or eliminate) profit from the products’ sales. Businesses, after all, are ultimately in the business of making money.
Regardless of Trump or the NAFTA deal, it’s great to see an American automaker reinvest in its U.S. operations. It’s manufacturing jobs and other blue-collar work that sustains the middle class and keeps the American economy working. These added jobs, along with those from thousands of other companies in similar situations like GM, will surely help revitalize the American Dream as the decade comes to a close.
Read our full review on the Chevrolet Silverado here.