General Motors Faces Backlash From the UAW Over its Plans to Invest $1 Billion to Build EVs in Mexico
U.S. automaker General Motors is being criticized by the United Auto Workers Union (UAW), which represents U.S. auto workers, over plans to invest $1 billion in a new EV manufacturing facility in Mexico.
GM plans to build electric vehicles in 2023 at its Ramos Arizpe Vehicle Assembly plant. The plant currently builds the Chevrolet Blazer and Equinox SUVs, as well as engines and transmissions.
GM said it also plans to build batteries and electrical components at Ramos Arizpe and is making other improvements to its manufacturing complex, including a new paint shop and innovative technology. The expansion will begin during the second half of this year, the company said.
In a statement, GM said the investments are to prepare the site for "an expansion of the assembly and Global Propulsion Systems plants, to make Ramos Arizpe Complex the fifth GM manufacturing facility to produce electric vehicles."
The United Auto Workers criticized GM's decision to build EVs in Mexico instead of using the union's members in the United States as President Joe Biden is considering new incentives for electric vehicles. Biden has called for $174 billion to boost U.S. EV production, sales and infrastructure in the U.S.
Terry Dittes, UAW vice president and director of the General Motors Department, called it "unseemly" to accept U.S. government subsidies and make vehicles outside the United States.
"At a time when General Motors is asking for a significant investment by the U.S. government in subsidizing electric vehicles, this is a slap in the face for not only UAW members and their families but also for U.S. taxpayers and the American workforce," said Dittes in a statement.
GM has roughly 46,000 hourly employees that are UAW union members.
GM responded to the UAW statement by noting it has "recently announced nearly 9,000 jobs and more than $9 billion in new electric vehicle or battery cell manufacturing facilities in Michigan, Ohio and Tennessee."
Earlier this month, GM announced a $2.3 billion investment at its plant in Spring Hill, Tennessee to build a second electric vehicle battery plant in a joint venture with South Korean battery maker LG.
The Tennessee factory will support GM's future EVs that will be built in Tennessee. The new battery plant follows GM's Oct 2020 announcement that it will invest $2 billion in its Spring Hill Manufacturing facility to build fully-electric vehicles, including the upcoming Cadillac LYRIQ crossover, the first electric vehicle from GM's luxury division. The LYRIQ will be the first EV produced at GM's Spring Hill assembly plant.
GM said this month that construction on the approximately 2.8 million-square-foot facility in Tennessee will begin immediately and the plant is scheduled to open in late 2023.
GM's announcement of the EV battery plant in Mexico was also under scrutiny. The automaker issued the news release about the Mexican investment in Spanish on its website. The company later provided an English translation only when asked.
"I'm sure this investment will contribute to continuing boosting Mexican manufacturing while bringing development to the region, the industry and the country," said Francisco Garza, president of GM's Mexican unit, during a webcast announcement. Garza said he could not rule out adding a third production shift to the Ramos Arizpe facility in the near term, which would depend on meeting certain economic conditions.
As reported by Reuters, GM plans to build two new Chevrolet-branded electric SUVs at Ramos Arizpe starting in 2023, according to Sam Fiorani, who tracks future vehicle production for AutoForecast Solutions. A GM spokesman however dismissed Fiorani's comments as speculation.
GM was targeted in the past by former President Donal Trump for building vehicles like the Chevy Blazer in Mexico instead of the U.S. Trump had threatened to tax GM vehicles imported from Mexico.
GM is undergoing a significant change. The automaker plans to phase out the production of gas-powered passenger vehicles by 2035, as part of its corporate mission of a zero emissions future.
GM's Detroit-Hamtramck assembly plant in Michigan, has been renamed "Factory ZERO" to reflect GM's corporate mission. The plant is being retooled to become GM's premier electric vehicle plant as the company looks to take on Tesla, which is now the world's most valuable automaker. The plant will build the upcoming Hummer EV later this year.
On Wednesday, Biden told U.S. lawmakers "there's no reason why American workers can't lead the world in the production of electric vehicles and batteries."
GM plans to launch 30 EVs globally by the end of 2025. More than two-thirds of these models will be available in North America under the Cadillac, GMC, Chevrolet and Buick nameplates.
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