There’s been plenty of coverage, during this highly politicized presidential election year, of automotive production moving down to Mexico. But General Motors is bringing at least some production back to the U.S.
Sources at GM and the United Auto Workers Union have confirmed that a newly enlarged assembly plant in Flint, Michigan, will start producing some of the full-size Chevrolet Silverado and GMC Sierra pickups currently rolling off a GM line in Silao, Mexico.
The union sent a letter to members at the Flint plant advising them that there will likely be additional hiring of both full-time and temporary line workers, explaining, “The increase in light-duty pickup volume for Flint Assembly is (for vehicles) currently being built in Silao.”
The letter advised workers that they will likely be asked to put in a significant amount of overtime. “For those members who like to work they can work as many Saturdays as they want earning an extra $12k to $15k next year.”
For the record, GM officials declined to either confirm or deny the substance of the UAW letter, though several sources inside said the union’s message was accurate.
GM spokesman Monte Doran did note that in the current market, GM is struggling to meet demand for the two full-size pickups – and for just about every other truck and crossover it builds, for that matter. “We’re excited we can sell every truck we can make (because of) incredible increases in customer demand.”
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The expansion of truck production in Flint – the original home of both GM and the UAW – isn’t entirely a surprise. Last August, the maker announced it would invest $877 million to upgrade the facility, including the construction of a new body shop.
GM will ramp up production in Flint even before the makeover is complete, according to the union, with the company adding more shipping docks, changing out old manufacturing equipment and upgrading the assembly line itself.
Exactly how much more capacity will be added is unclear. But at $877 million, the investment is nearly equivalent to opening up an entirely new factory capable of producing north of 250,000 trucks annually, according to industry observers.
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Exactly what will happen in Silao is not clear, sources declining to discuss specific plans for the Mexican factory, other than to suggest it will continue to produce some pickups going forward. But by reducing output of Silverados and Sierras, GM could make room for other models that might carry a lower price tag or generate lower margins than the highly profitable full-size pickups.
Mexico has become the production site of choice for a growing list of manufacturers looking to maximize profits on small and lower-priced models. It helps that the average Mexican auto workers is believed to earn only about 20% of the wages and benefits paid to U.S. line workers, according to several studies.
Mexico also has other advantages, including its closer proximity to Latin American markets and the fact that the country has negotiated a huge number of free trade agreements with markets around the world.
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Ford Motor Co. found itself in the middle of a noisy brouhaha when it announced plans to move several models, including the compact Focus, to a new plant in Mexico. That was picked up as a cause celebre by GOP presumptive presidential nominee Donald Trump – even though many of the items in his own Trump label fashion line are also produced in Mexico and China.