General Motors (GM) has recently revealed its plan to invest $500 million in its Arlington Assembly plant located in Texas. The purpose of this investment is to upgrade the facility so that it can manufacture the next generation of full-size gasoline-powered SUVs. However, the investment is contingent upon successful negotiations with local government officials, as stated by GM in a press release.
This announcement marks the third major investment made by GM within the same week in its plants dedicated to the production of gasoline-powered trucks. These trucks have proven to be highly popular and profitable, playing a crucial role in funding GM’s transition towards electric vehicles (EVs) in the coming decade. CEO Mary Barra previously acknowledged that the profitability of EVs is currently insufficient compared to their gasoline-powered counterparts due to high battery costs.
The investment in the Arlington plant is aimed at boosting sales of the profitable full-size SUVs manufactured there. Notable models produced at the facility include the Chevrolet Tahoe and Suburban, GMC Yukon and Yukon XL, and Cadillac Escalade, Escalade ESV, and Escalade-V. However, GM has not disclosed any specific details or timelines regarding future full-size SUVs.
In terms of sales, GM sold approximately 40,247 Escalades in the United States last year, making it the highest-selling vehicle in the Cadillac brand. The sales of Suburbans increased by 6% compared to the previous year, with a total of 50,951 units sold. Tahoes remained relatively flat with 105,756 units sold, while total Yukon sales decreased by 2.3% to 82,304 units. Overall, GM sold a total of 2.3 million vehicles in the United States last year.
Gerald Johnson, executive vice president of GM’s Global Manufacturing and Sustainability, expressed gratitude to the employees of the Arlington Assembly plant for their dedication and record-breaking production achievements. He emphasized that the investment reinforces GM’s commitment to customers. Additionally, Johnson highlighted the significance of the investment in bolstering GM’s manufacturing operations across the United States, which comprise more than 50 assembly, stamping, propulsion, and component plants, as well as parts distribution centers.
The $500 million investment will primarily cover the acquisition of new tooling and equipment for the stamping, body shop, and general assembly areas of the Arlington plant. The United Auto Workers (UAW) union welcomed the news and encouraged GM to reinvest the profits from successful vehicle models into the workforce.
Mike Booth, UAW vice president of the GM department, praised GM’s recognition of the hard work contributed by UAW members and expressed pride in the production of quality, union-made products in the United States.
Texas Governor Greg Abbott also lauded GM’s investment, acknowledging the pivotal role played by the Arlington Assembly plant in the Dallas-Fort Worth area’s economy. He stated that the investment of over half a billion dollars will strengthen Texas’ position as a global manufacturing leader, generating well-paying jobs for future generations of Texans.
GM has previously announced its intention to offer exclusively electric vehicles by 2035. However, to finance this transition, the company relies on the continued success of highly profitable vehicles such as full-size pickups and large SUVs. In line with this strategy, GM recently disclosed its plans to invest $1 billion in Flint Assembly and Flint Metal Center for the production of the next generation of gasoline-powered heavy-duty pickups. Additionally, the company will invest CA$280 million ($208 million in U.S. dollars) to upgrade its Oshawa Assembly plant in Canada, enabling the manufacture of next-generation full-size gasoline-powered pickups.
Source: AutoNews (subscription required)