GM to announce S$1.4b investment in US factories

US stocks fall, with financials, transports and other big post-election gainers losing ground as earnings season kicked into gear. VIDEO: REUTERS
The General Motors logo on the world headquarters building in Detroit, Michigan.
The General Motors logo on the world headquarters building in Detroit, Michigan. PHOTO: AFP

WASHINGTON (REUTERS) - General Motors will announce as early as Tuesday (Jan 17) long-held plans to invest about US$1 billion (S$1.43 billion) in its US factories, following recent criticism of the company by President-elect Donald Trump, a person briefed on the matter told Reuters late on Monday.

The largest US automaker is making the decision for business and not political reasons, said the person, who asked not to be identified.

The investment will help GM create or retain more than 1,000 jobs, while the automaker also plans to tout other efforts to boost US employment, including adding engineers, the person added.

GM general counsel Craig Glidden told the Wall Street Journal, which reported the company's plans earlier on Monday, that any investment the company might disclose had been long planned and was not a response to Mr Trump's criticism.

GM declined comment on the investment to Reuters.

Since the beginning of this year, GM has come under heavy criticism from Mr Trump for building vehicles in Mexico, as have other automakers. On Jan 3, Mr Trump threatened to impose a "big border tax" on GM for making some of its Chevrolet Cruze compact cars in Mexico.

At a news conference last week, Mr Trump cited recent US investments by other automakers and said "General Motors will be following, and I think they will be."

Mr Trump, who campaigned hard on bringing manufacturing jobs back to the United States, said in an interview with German newspaper Bild published on Monday that he would impose a border tax of 35 per cent on German car companies' vehicles imported to the US market.

Earlier this month, he criticised Toyota Motor's plans to move production of the Corolla to Mexico from Canada.

Auto sales have been rising since 2009 and hit a new record in 2016. Automakers have recently been touting American investments, but say the investments have not been in response to Mr Trump.

Last week, Japan's Toyota said it would invest US$10 billion in the US over the next five years, while Fiat Chrysler Automobiles said it would invest US$1 billion to modernise two plants in the Midwest, creating 2,000 jobs.

Ford Motor announced this month it would cancel a planned US$1.6 billion factory in Mexico and would invest US$700 million at a Michigan plant.

GM's "general plan is to build where we sell and we're focused on what we're doing in the United States," Chief Executive Mary Barra said in an interview with Reuters on the sidelines of an event in Washington on Monday. "We're a global company so we're going to continue that focus."

Ms Barra, who told Reuters she planned to attend Mr Trump's inauguration on Friday, said GM wants to work with him. "I do believe we have more in common than we have areas that we aren't aligned."

GM, which has more than 40 manufacturing sites in the US, last year announced US$2.9 billion in US investments. But even as GM invests in US plants, it has also been making job cuts. In recent months, GM announced plans to lay off about 3,300 employees at three factories.

It said in November that it would cut about 2,000 jobs when it ends the third shift at its Lordstown, Ohio and Lansing, Michigan plants in January. Last month, it said it planned to cancel the second shift and cut nearly 1,300 jobs from its Detroit-Hamtramck assembly plant in March.