GM Plans $1 Billion U.S. Investment in Nod to TrumpBy
Carmaker outlining plans similar to Ford, Fiat Chrysler
Trump threatening Mexico-built cars, praising U.S. hiring
General Motors Co., facing pressure from President-elect Donald Trump to boost hiring, plans to announce on Tuesday it will invest $1 billion in U.S. plants over several years, according to a person familiar with the matter.
The largest U.S. automaker expects to add or retain 1,000 jobs at several existing facilities, said the person, who asked not to be identified because the matter is private. The investment announcement, which is being accelerated amid pressure from the president-elect, is related to building products that were in the works and approved before Trump won the election in November, the person said.
GM becomes just the latest automaker to announce U.S. factory investments in response to Trump. Rivals Ford Motor Co. and Fiat Chrysler Automobiles NV said this month they’ll spend on U.S. plants after Trump threatened for months to slap Mexico-built vehicles with a 35 percent import tax. Carmakers are eager to cooperate with the incoming administration as they prepare to ask for favors including weaker fuel economy rules and lower corporate taxes.
“This is the normal course of business,” said Maryann Keller, an independent 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 $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 U.S. 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 Wednesday 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 $9 billion a year toward capital expenditures, including for new models and factory upgrades. The automaker announced at least $2.9 billion in U.S. investments for future production of engines and vehicles in 2016.
Trump targeted GM earlier this month for importing a small number of Chevrolet Cruze hatchback models from Mexico to the U.S. The automaker 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.
The auto industry has been in Trump’s cross hairs. He has threatened Japan’s Toyota Motor Corp. and Germany’s BMW AG with tariffs on their Mexico-made cars. BMW sees “no reason” to change plans, Peter Schwarzenbauer, who heads the automaker’s Mini and Rolls-Royce brands and its car-sharing business, told reporters on the sidelines of a conference in Munich.