GM to invest $A3.0b plus in ICE

THE rush to reduce staff in the transition to less labour-intensive EV production has seen some companies, such as Ford, shed thousands of workers at all levels. But archrival General Motors seems to be taking a different tack signalling it will continue manufacturing large numbers of ICE powered vehicles right up to 2030 and beyond.

 

The giant US manufacturer has already given job security commitments to workers before upcoming negotiations between unions and GM management.

 

According to publication Automotive News (AN), the commitments were given before the United Auto Workers (union) started contract negotiations with management so tougher issues can be discussed at the bargaining table.

 

Sources reported that GM expects large, ICE-powered pick-ups and SUVs that are helping to fund its switch to electric vehicles, to continue making big money for years to come. Its plans are underlined by a $US2.0 billion ($A3.0 billion) plus investment for the next-generation full-size GM pick-ups and SUVs.

 

This level of commitment virtually guarantees ICE-powered vehicles will be rolling off GM assembly lines well beyond 2030.

 

According to AE, the investment commitment also amounts to “GM’s opening move in this year’s contract talks with unions in the US and Canada, aiming to assuage concerns that employees won’t have jobs in the future at internal combustion factories”.

 

GM boss Mary Barra said, “We want to find a solution that’s good for our employees, good for the company, because we need to continue to reinvest”.

 

“Right now, we’ve made some important announcements about reinvesting in these plants because I think job security is very important. To do that, the company has to be successful so we can continue to develop new products that customers want to buy,” said Ms Barra.

 

The commitment has wider ramifications for the US as the large pick-ups and SUVs are built at plants across the country, including Michigan, Texas, Indiana and Ontario; and are, according to the AE report, key contributors to GM’s profitability.

 

The publication says the automaker did not discuss details or production timing of the redesigned light- and heavy-duty Chevrolet Silverado and GMC Sierra or its Chevy Tahoe and Suburban, GMC Yukon and Cadillac Escalade SUVs.

 

It quoted vice president of global vehicle forecasting at AutoForecast Solutions, Sam Fiorani as saying, “Next-generation Silverado and Sierra pickup production is projected to start in 2027, with production of the overhauled SUVs to follow in early 2028. Based on a typical life cycle, that timing would keep those vehicles on assembly lines through at least the early 2030s, if not longer, because it will take time to develop electric versions that can accommodate owners’ hauling and towing needs”.

 

“For years, they (workers) have been worried about all the rumours that it takes fewer people to build an electric vehicle, so when you hear that as an assembly line worker, you fear for your job. Seeing the company invest billions of dollars in internal combustion plants calms your nerves, at least for this contract,” said Mr Fiorani.

 

The total financial commitment from GM in ICE amounts to more than $US2.3 billion ($A3.4) billion across plants that will continue to focus on its internal combustion production going forward.

 

“ICE production will continue in parallel with GM plans to electrify its light duty line up by 2035,” said GM executive vice president of global manufacturing and sustainability, Gerald Johnson.

 

“Company leaders believe the automaker can train its workers to build EVs and their parts as production ramps up, while maintaining internal combustion production for years.

 

“All signs point to a growing number of people that are saying that they’re interested in their next vehicle being an EV and then there are still those who said ‘my truck and the functionality that I have in my truck is what I’m married to, please don’t stop’ ... We can do both, and we will do both,” he said.

 

GM makes a lot of money from its full-size pick-ups and SUVs and the profits they generate fund the company's future investments.

 

The AN report also quotes AutoPacific Inc. manager of industry analysis, Paul Waatti, on the importance of these large ICE vehicles who said, “They’re also some of the most difficult vehicles to make electric because of their size”.

 

“With all the headlines and focus on EVs and the surrounding investments, it’s easy to think the transition is right around the corner. The reality is, it’s a decades’ long transition, not a years’ long, and nowhere is that more true than with full-size pick-ups and SUVs. They will definitely be among the last to go exclusively EV,” he said.

 

Talks between the UAW and GM are scheduled to start soon.