General Motors (GM) is making a big investment in its US production footprint — in part because of uncertainty over President Trump’s tariffs.
GM plans to invest $4 billion in certain US plants over the next two years to expand production of some vehicles and reshore production of others from Mexico.
“So as we look at our landscape, as we look at the world around us, whether it’s the tariff situation, EV adoption, there’s a real opportunity to rebalance some of our manufacturing,” GM CFO Paul Jacobson said to Yahoo Finance from the Deutsche Bank Auto Conference in Manhattan.
GM said it will add production of the gas-powered Chevrolet Blazer and Chevrolet Equinox, which are currently made in Mexico, to the US starting in 2027. GM will also begin making gas-powered full-size SUVs like the Chevrolet Tahoe and light-duty pickup like the Silverado at its Orion Michigan plant, as well as shift EV production from that plant to the Factory Zero Michigan plant, which produces only EVs.
GM said it was No. 1 in overall full-size pickup sales during Q1, which includes Chevrolet Silverado and GMC Sierra models with more than 200,00 units sold — its best first quarter since 2007. GM said full-size pickups also had their best Q1 since 2007, with models like the Tahoe, Suburban, and GMC Yukon seeing sales up 31%.
“It’s clear that EV demand has slowed a bit, so we’re able to fill that back at Factory Zero and really convert Orion to a much better-utilized plant for full-size SUVs, which will get us some incremental capacity and help take some of the pressure off our team at Arlington [Texas], but also full-size trucks where we’ll be able to fill that plant up and have a really secure future going forward for [internal combustion engine] production,” Jacobson said.
While rebalancing is a positive in terms of production and shifting powertrains in light of consumer demand makes sense, the moves also address tariffs, at least in the near term.
GM said in early May that it would take a $4 billion to $5 billion hit to EBIT due to tariff exposure, though it would mitigate up to 30% of that cost due to remediation and cost-cutting efforts.
Jacobson said that GM’s peak tariff exposure and impact would occur in the second quarter, as the new initiatives will take time to complete. And despite tariff uncertainty, Jacobson said GM has maintained pricing in the environment and even gained market share, despite others cutting prices.
Read more: What Trump’s tariffs mean for the economy and your wallet
In terms of imports, GM hasn’t thus far altered shipments in other markets including Korea, where the popular Buick Encore GX, Buick Envista, Chevy Trailblazer, and Chevy Trax are produced.
Jacobson said GM’s Mexico operations will still crank out vehicles and won’t reduce production, but will eventually shift production for non-US export markets once GM’s domestic production moves noted above come online.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.
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