Updated: January 17, 2017
General Motors Corporation (GM) announced today it plans to invest $1 billion in the US, to bolster domestic production capacity.
They expect the investment will create or retain roughly 1,500 full time jobs.
This news bought them some good press with President Elect Donald Trump, who thanked them, along with Walmart, via twitter;
Thank you to General Motors and Walmart for starting the big jobs push back into the U.S.!
— Donald J. Trump (@realDonaldTrump) January 17, 2017
In addition to this, GM’s spokeswoman Joanne Krell said the company plans to add 5,500 new jobs over the next 2-3 years by taking other measures by reallocating current capital.
This will be done by reshoring axle production from Mexico, creating 450 new jobs, and increasing engineering work with GM Financial and advanced technology.
This announcement comes on the heels of the Detroit Auto Show, where other automakers, including competitors Toyota and Fiat Chrysler, pledged $22.3 billion in new domestic investments.
It also follows the appointment of Mary Barra, GM’s CEO, to sit on President Elect Trump’s economic advisory panel.
Trump’s Tweets have an Economic Impact
Although GM, like other automakers, claim that Trump’s rhetoric and threat of protective tariffs have not impacted their decisions, the volume of new US investments in response to his pressure (and therefore, public pressure) tells a different story.
GM has come under heavy fire from President Elect Donald Trump, who’s blasted the company for offshoring vehicle production to Mexico.
Earlier this month, Trump tweeted that GM would risk facing a tariff should it continue to produce vehicles in Mexico for sale in the US market:
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
— Donald J. Trump (@realDonaldTrump) January 3, 2017
He reiterated his remarks during last week’s press conference (January 11), saying: “I hope that General Motors will be following” their lead.
The “Trump Effect” is not limited to automakers. It also impacted the decisions of companies like Amazon, Alibaba, and Softbank.
GM’s Not Alone: Automakers Are Stepping Up
- Last week, Fiat Chrysler Automobiles announced it plans to invest $1 billion in US modernizing 2 plants in the US Midwest. It expects this will create 2,000 new jobs.
- Ford has also pledged a $700 million upgrade in its Flat Rock, Michigan assembly plant, and an additional $700 million for its Louisville, Kentucky plant. Hundreds of jobs are anticipated.
- German automaker Daimler AG, known for its Mercedes-Benz brand, said on Sunday, January 8, that they planned to invest $1.3 billion in their Alabama SUV plant, according to CEO Dieter Zetsche.
- Toyota Motor Corp’s CEO Jim Lentz announced plans to invest $10 billion in the US over the next 5 years, and an additional $10 billion over the next 5 years—that’s $20 billion dollars in new investment.
- Honda also announced last week that it will be making its new hybrid vehicle in America, although hasn’t released financial details. Honda also plans to invest in its Georgia transmission plan. Again, no firm numbers.
This is becoming a pattern—perhaps the cycle of offshoring that’s cost America 10 million jobs is finally breaking.
Time will tell.