General Motors Co. announced on Tuesday that it plans to invest $4 billion in U.S. manufacturing plants over the next two years. The new investments in its domestic factories will increase U.S. production of both gas and electric vehicles, enabling GM to assemble over two million vehicles in the U.S. per year.
The move will expand factories in Michigan, Kansas, and Tennessee that produce several of GM’s most popular vehicles, replacing much of the company’s reliance on its factories in Mexico.
The announcement comes after President Donald Trump implemented tariffs of 25 percent on imported vehicles and many auto parts earlier this year; the country also experienced muted May inflation that defied the expectations of those fearful over tariffs. Prices for both new and used cars actually declined last month.
GM’s pivot to bring more manufacturing to the U.S. marks one of the largest responses by automakers thus far to the Trump tariffs, which increasingly seem to be permanent, at least in part. While Trump has not announced a revised trade deal with Mexico, even recent announcements of deals with the U.K. and China have both retained significant tariffs. (RELATED: Trump’s New US–UK Trade Deal Puts America First)
In GM’s statement, the company’s chair and CEO, Mary Barra, said, “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.”
According to an Oxford Economics report, GM directly created $39 billion’s worth of U.S. GDP and directly employed 97,000 workers in U.S. automotive manufacturing jobs in 2022. The company’s network includes 50 U.S. manufacturing plants and parts facilities in 19 states. According to GM, “nearly one million people in the U.S. depend on GM for their livelihood, including employees, suppliers, and dealers.”
The company’s president, Mark Reuss, also emphasized how GM’s new move, spurred by Trump’s tariffs, will lead to more American jobs. “Today’s news goes well beyond the investment numbers — this is about hardworking Americans making vehicles they are proud to build and that customers are proud to own,” he said.
The shift dramatically reverses a decades-long trend of auto companies moving much of their manufacturing out of the U.S. to Mexico and overseas. According to Bloomberg News, GM had accelerated moves to produce parts and vehicles in Mexico beginning in the 1980s to take advantage of lower wages and avoid growing labor and retiree costs in the U.S. After GM’s new American investments, the company will build its pickups in five factories: three in the U.S. and one each in Canada and Mexico. Overall, GM told Bloomberg that the company plans to add between 3,000 and 4,000 U.S. jobs after all the new production is set up.
The move is a sign that GM “believe[s] the future of transportation will be driven by American innovation and manufacturing expertise,” according to their statement. At the very least, as the future of tariffs remains in flux, the safest move is to make in America.
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