GM to invest $4 billion in U.S. factories as tariffs mount and EVs slow
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Piego Connally, assembly team leader at the Fairfax Assembly plant in Kansas City, Kansas. Photo courtesy of GM
General Motors is investing $4 billion to produce more gasoline vehicles in the U.S. to cope with the twin challenges of high tariffs and low demand for electric vehicles.
Why it matters: The plan — which includes shifting some production from Mexico — will no doubt be viewed as a win for President Trump's tariff policies.
- But there's also a practical reason: if GM can avoid tariffs by building more cars in the U.S., it might as well build ones it knows it can sell.
Driving the news: GM is adding production at plants in Michigan, Kansas and Tennessee beginning in 2027
- GM's Orion Assembly plant near Detroit will be retooled to produce gas-powered full-size SUVs and pickups, scrapping an earlier plan to build electric pickups there.
- To meet strong demand for its gas-powered Chevrolet Equinox, GM is also adding production at its Fairfax Assembly plant near Kansas City, a portion of which is moving from Mexico.
- GM is also moving production of the gas-powered Chevrolet Blazer from Mexico to its Spring Hill, Tennessee, plant.
What they're saying: "We believe the future of transportation will be driven by American innovation and manufacturing expertise," GM CEO Mary Barra said in a release.
- "Today's announcement demonstrates our ongoing commitment to build vehicles in the U.S and to support American jobs. We're focused on giving customers choice and offering a broad range of vehicles they love."
The intrigue: UAW President Shawn Fain said GM's move proves the auto industry can do more to reshore manufacturing in the U.S.
- "GM's decision to invest billions in American plants and prioritize U.S. workers is exactly why we spoke up in favor of these auto tariffs," he said in a statement.
- "The writing is on the wall: the race to the bottom is over. We have excess manufacturing capacity at our existing plants, and auto companies can easily bring good union jobs back to the U.S. They can prove the naysayers wrong by investing in our communities and putting workers before corporate greed. GM is showing that it can be done."
Between the lines: Under Barra, GM bet heavily on electric vehicles, but sales have been slower than expected.
- The manufacturing moves allow the carmaker to expand production of high-profit vehicles most in demand — gas-powered trucks and SUVs — while leveraging excess U.S. factory capacity to avoid tariffs.
- GM said it will continue to produce battery-electric versions of the Equinox and Blazer in Mexico.
- It will also build some gasoline-powered Equinox vehicles in Mexico for non-U.S. markets.
What to watch: GM said it is on track to begin production of the 2027 Chevrolet Bolt EV in Fairfax by the end of this year.
- It also expects to make new future investments in Fairfax for its next generation of affordable EVs.
Editor's note: This story has been updated to add comments from the UAW.
