Ever heard the term “Insourcing?”

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.

Continue reading for more information.

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.

Press Release

General Motors today announced that it will invest an additional $1 billion in U.S. manufacturing operations. These investments follow $2.9 billion announced in 2016 and more than $21 billion GM has invested in its U.S. operations since 2009.

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.

“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 Chairman and 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.”

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.

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