Detroit: General Motors Co. announced a $1 billion (Dh3.67 billion) US investment plan comprised mostly of spending on models and plants long in the works, becoming the latest automaker to answer to pressure from President-elect Donald Trump to create jobs.
The nation’s top carmaker will add or retain about 7,000 salaried and hourly workers, including almost 2,000 in domestic factories, spokesman Pat Morrissey said. The announcement was accelerated after Trump urged the company last week to follow Ford Motor Co. and Fiat Chrysler Automobiles NV and detail US spending plans, said a person familiar with the matter, who asked not to be identified because the matter was private.
Earlier Tuesday, Korea’s Hyundai Motor Co. and Kia Motors Corp. said they’ll increase US investment over the next five years and consider building a new plant in the country. Trump praised Ford and Fiat Chrysler last week for plans to spend on US factories after threatening for months to slap Mexico-built vehicles with a 35 per cent import tax. The president-elect is taking credit mostly for expenditures the companies would’ve made anyway, according to Maryann Keller, an independent auto industry consultant.
“This is the normal course of business,” Keller, who’s based in Stamford, Connecticut, said of GM. “All they’re doing is announcing investments that they would have made anyway.”
Carmakers are eager to cooperate with the incoming administration as they prepare to ask for favours including weaker fuel economy rules and lower corporate taxes. And the auto industry isn’t alone: Wal-Mart Stores Inc. will create about 10,000 retail jobs, the country’s largest private employer said Tuesday.
Read more: Trump tariffs probably won’t stop job flight
‘Big Stuff’
Less than two minutes into his first formal press conference since the election, Trump highlighted Ford’s decision to cancel a $1.6 billion factory in Mexico and expand an existing plant in Michigan. Fiat Chrysler committed $1 billion toward making three new Jeeps in the US and enabling a Michigan facility to manufacture a Ram pickup now produced in Mexico. He said he hoped GM would follow.
“With all of the jobs I am bringing back into the US (even before taking office), with all of the new auto plants coming back into our country and with the massive cost reductions I have negotiated on military purchases and more, I believe the people are seeing ‘big stuff,” Trump wrote in a series of tweets Tuesday.
GM will begin to bring axle production for its next-generation full-size pickups to operations in Michigan, including work previously done in Mexico, creating 450 US jobs, the company said Tuesday. About 1,500 workers will be added or retained at factories detailed during the course of the year, and the company will add about 5,000 employees to develop advanced technology or join its lending subsidiary GM Financial.
GM’s Spending
The automaker budgets about $9 billion a year toward capital expenditures, including for new models and factory upgrades. The US is no longer the biggest market in the world for the Detroit-based company — that title goes to China, where it plans to introduce 18 new or refreshed vehicles this year.
The automaker announced at least $2.9 billion in US investment in 2016, bringing its total since 2009 to $29 billion.
Trump targeted GM earlier this month for importing a small number of Chevrolet Cruze hatchback models from Mexico to the US. The company has made separate recent announcements 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, the company said it would spend $5 billion on new plants in the country by 2018, creating 5,600 jobs. Facilities making the Chevrolet Equinox and GMC Terrain, shown last week at the North American International Auto Show in Detroit, account for about $1 billion of those outlays.
Trump’s Scrutiny
The auto industry has been in Trump’s cross hairs. He’s threatened Japan’s Toyota Motor Corp. and Germany’s BMW AG with tariffs on Mexico-made cars. BMW sees “no reason” to change plans, said Peter Schwarzenbauer, who heads the automaker’s Mini and Rolls-Royce brands and its car-sharing business.
Hyundai and its affiliate Kia said Tuesday they plan to invest $3.1 billion in the US over the next five years, up from $2.1 billion spent in the five years through 2016. South Korea’s two largest automakers group may produce Hyundai’s upscale Genesis vehicles and a US-specific SUV in the country, said President Chung Jin-haeng, who also oversees strategic planning for Kia.
“We expect a boost in the US economy and increased demand for various models as President-elect Trump follows through on his promise to create 1 million jobs in five years,” Chung said. “We will actively consider introducing new models that have increasing demand and profits.”
