In a big win for the Trump administration's tariff strategy, General Motors (GM) announced plans to invest $4 billion in three new U.S. assembly plants, including the production lines for the Chevrolet Blazer and Chevrolet Equinox, which the company currently builds in Mexico.
This move comes amid President Donald Trump's imposition of 25% tariffs earlier this year on imported vehicles and auto parts, to encourage more production in the United States. The automotive tariffs took effect for imported vehicles in April and for foreign-made auto parts in May.
GM said back in February that it expected to be able to offset between 30% and 50% of the tariffs without deploying any capital in the short term, reported CNBC.
The United Auto Workers (UAW) praised GM's decision, calling it a validation of the effectiveness of global auto tariffs, while the White House welcomed the investment, deeming it a major win for President Trump's trade policies.
So far, trade talks between the White House and its counterparts in Mexico have not made much progress.
The U.S.-based automaker stated in a June 10 press release that the new domestic plants will boost production of gas-powered vehicles and some electric models over the next two years.
“We believe the future of transportation will be driven by American innovation and manufacturing expertise,” said Mary Barra, GM's chair and CEO.
“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,” she added.
Plans to construct three plants in Michigan, Kansas, and Ohio are underway and are expected to add between 3,000 and 4,000 U.S. jobs once all production is in place. The Detroit manufacturer said that the largely idle Orion Assembly Plant, Orion, Mich., which was formerly set up to build all-electric trucks like the Chevrolet Bolt, will now produce gas-powered full-size SUVs and light-duty pickup trucks starting in early 2027.
Meanwhile, the Fairfax Assembly Plant in Kansas City, Kan., will start producing the gas-powered Chevrolet Equinox in mid-2027 and the 2027 Chevrolet Bolt EV by the end of 2025, while the Spring Hill Manufacturing Plant in Spring Hill, Tenn., will make the gas-powered Chevrolet Blazer, Cadillac Lyriq, and Vistiq EVs, as well as the Cadillac XT5.
According to GM, the investment in these three plants is expected to give it the ability to assemble more than two million vehicles per year domestically. GM has been reassessing its production footprint in North America since the tariff policy was announced and will pull back from further additional spending on electric vehicles, after putting a heavy emphasis on those models over the past few years.
Company executives stated that they would take a “wait and see” approach until they had more clarity on the regulatory environment, including the auto levies, before making any decisions.
GM's CFO Paul Jacobson told investors in May that the tariffs would probably not be as harmful as the markets feared and noted that new potential trade deals with other countries and the automaker's ability to mitigate some costs of the tariffs were promising signs.
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