General Motors is investing in two components plants to help boost its production of full-size pickups.
The automaker said Thursday it will invest $93 million at its Romulus Powertrain plant and $7 million at its Bedford Casting Operations in Bedford, Indiana.
The Romulus investment will add machining capability, while the Bedford investment will increase the plant’s die casting capabilities.
Both investments will help GM boost production of the 10-speed automatic transmissions used in the Chevrolet Silverado and GMC Sierra light-duty, full-size pickups.
GM builds its light-duty pickups at Fort Wayne Assembly in Indiana and Silao Assembly Plant in Mexico. The automaker assembles its heavy-duty pickups at Flint Assembly.
Work will begin immediately at both Romulus and Bedford despite an industry-wide shortage of semiconductor chips that has brought chaos to the auto industry.
Demand for the chips, used for personal electronics such as laptops, is competitive. It has disrupted production at many automakers, including GM, Ford Motor Co. and Stellantis, which used to be Fiat Chrysler Automobiles.
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But the chip shortfall is not expected to affect the production of GM’s pickups, CEO Mary Barra said during GM’s fourth-quarter and year-end earnings call with the media Wednesday.
GM said it expects to report $10 billion to $11 billion in profits for 2021, and that takes into account a $1.5 billion to $2 billion hit from the chip shortage. Barra said GM is working with all suppliers to mitigate production disruptions caused by the chip deficit and GM will protect truck production.
More:GM’s Mary Barra: Semiconductor chip shortage won’t disrupt truck production
“We won’t lose any production throughout the year where it relates to pickups and SUVs,” Barra said. “We’re going to be able to meet our production outlook.”
GM spokesman David Caldwell said the increased production enabled by this investment in Romulus and Bedford extends well into the future, so, “No, at this point we don’t believe the chip shortage impacts those facilities directly.”
GM’s push to churn out pickups is crucial because the development of electric vehicles and self-driving car technologies is funded on the back of sales of the highly profitable pickups and SUVs. GM has said it will bring 30 new EVs to market by 2025, with a plan to offer an all-electric light-duty lineup by 2035.
“Demand for our Chevrolet Silverado and GMC Sierra full-size pickups continues to be very strong and we are taking action to increase the availability of our trucks for our dealers and customers,” said Phil Kienle, GM vice president, North America Manufacturing and Labor Relations.
UAW Vice President and Director of the GM Department Terry Dittes said the investment reflects union members’ hard work and signals job security.
“By investing over $100 million dollars, GM has made a commitment to the work and jobs that benefit UAW members, their families and communities in Romulus and Bedford,” Dittes said in a statement.
Romulus currently employs about 1,200 hourly workers. It builds V-6 engines and 10-speed transmissions used in a variety of Chevrolet, Buick, GMC and Cadillac vehicles.
Bedford Casting Operations employs 715 hourly workers where they make transmission casings, converter housings, heads and small gas engine blocks used across GM’s four brands.
This investment will not immediately increase the number of jobs at either facility, GM’s Caldwell said.
More:Chip shortage cripples car production into the second half of 2021
Contact Jamie L. LaReau: 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.