GM to invest US$4B to shift some production from Mexico to the U.S.

Vehicles move along the 2023 Chevrolet Bolt EV and EUV assembly line at the General Motors Orion Assembly June 15, 2023, in Lake Orion, Mich. (AP Photo/Carlos Osorio, File)

Shares of General Motors rose before the opening bell after announcing plans to invest $4 billion to shift some production from Mexico to U.S. manufacturing plants as the automaker navigates tariffs that could drive prices higher.

President Trump signed executive orders in April, relaxing some of his 25 per cent tariffs on automobiles and auto parts, a significant reversal as the import taxes threatened to hurt domestic manufacturers.

Automakers and independent analyses say the tariffs could raise prices, reduce sales and make U.S. production less competitive worldwide. Trump portrayed the changes as a bridge toward automakers moving more production into the United States.

GM said late Tuesday that the investment will be made over the next two years and is for its gas and electric vehicles. The company will add production of the gas-powered Chevrolet Blazer and Chevrolet Equinox, which are made in Mexico, to two American plants starting in 2027. The Blazer will be produced at GM’s Spring Hill, Tennessee plant, while the Equinox will be made at its Kansas City, Kansas facility.

GM will also begin making gas-powered full-size SUVs and light duty pickup trucks at its Orion Township, Michigan plant, which was previously being reconfigured to make electric vehicles until demand for such cars weakened.

The new investment will give GM the ability to assemble more than 2 million vehicles per year in the U.S.

CEO Mary Barra said in a statement on Tuesday that GM is committed to building vehicles in the U.S. and supporting American jobs.

GM has 50 U.S. manufacturing plants and parts facilities in 19 states, including 11 vehicle assembly plants. The company says that almost 1 million people in the U.S. depend on it for their livelihood, including employees, suppliers, and dealers.

Last month GM lowered its profit expectations for the year as it braces for a potential impact from auto tariffs as high as $5 billion in 2025. The automaker now foresees full-year adjusted earnings before interest and taxes in a range of $10 billion to $12.5 billion. The guidance includes a current tariff exposure of $4 billion to $5 billion. GM previously predicted 2025 adjusted EBIT between $13.7 billion and $15.7 billion.

Shares of General Motors Co. rose almost 1 per cent before the opening bell Wednesday.

Michelle Chapman, The Associated Press