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October 28, 2021 12:15 PM, EDT

GM Factory ZERO Grand Opening Event Marks Automaker's Growth in EV

GM Factory ZERO Grand Opening Event Marks Automaker's Growth in EV Factory ZERO reflects the significance of this assembly advancing GM’s zero-crashes, zero-emissions and zero-congestion future. (Jeffrey Sauger/General Motors)

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General Motors will host the grand opening of Factory Zero in Detroit-Hamtramck next month to start building new electric vehicles, the automaker said Oct. 27.

The event signals that GM is on target in its promise to launch 30 new electric vehicles by 2025.

“I see a strong EV landscape in 2022, but in 2023 it really turns on,” CEO Mary Barra said on a call with Wall Street analysts.

GM released its third-quarter earnings results earlier Oct. 27. It reported a 40% drop in net income compared with the year-ago period, largely due to production disruptions as a shortage of semiconductor chips — which are used in many car parts — continues to plague the auto industry.

But Barra said the automaker is on schedule to start production of the first of 30 new EVs: the 2022 GMC Hummer EV pickup. GM will start building it at Factory Zero this fall.

GM currently offers the Chevrolet Bolt EV and EUV; both are assembled at Orion Assembly in Orion Township. GM has had the plant idled since Aug. 23 amid a global recall of the cars but will restart it with limited production Nov. 1.

General Motors Factory Zero

Renovations and new construction at the General Motors Detroit-Hamtramck Assembly Plant in September 2020. (Jeffrey Sauger/General Motors)

That Factory Zero, previously called Detroit-Hamtramck Assembly, will be operational at all is significant.

In late 2018, GM had put it on a list with four other North American factories to be permanently shuttered: Lordstown Assembly in Ohio, Oshawa Assembly plant in Ontario and two transmission plants in Michigan and Maryland.

But during the 2019 labor negotiations, amid a 40-day strike, the UAW got GM to commit $2.2 billion to retool the plant to make EVs there.

Later, GM agreed during negotiations with Unifor, the union that represents Canadian autoworkers, to keep Oshawa open to build full-size pickups starting later this year.

GM has said it expects to eventually employ 2,200 people at Factory Zero once it is running. That’s about double what it employed there when GM idled it 18 months ago to retool it.

Earlier this month, Factory Zero started building pre-production Hummer pickups.

Terry Dittes, UAW vice president and director of the GM department, told the Free Press on Oct. 27 that the November grand opening of Factory Zero “is a testament to the dedication and quality work of UAW GM Local 22 members at the retooled Detroit- Hamtramck facility. Through solidarity and collective bargaining, this plant will reopen as a retooled plant making vehicles of the future and employing more UAW GM members than at its closure.”

GMC has about 10,000 pre-orders for the Hummer EV pickup, which starts at $112,595 for Edition 1. More trim levels, due out next year, will be priced below $80,000. GM expects to call back hourly workers who want to work at that plant soon and start hiring additional workers next year.

“UAW members are excited about building these automobiles of the future,” Dittes said.

In a few years, GM’s hourly workforce overall will be building more EVs.

In a letter Barra wrote to shareholders Oct. 27, she reiterated that by 2025 GM’s North American EV assembly capacity will reach 20% and climb to 50% by 2030.

“Leveraging these established assets for EV production means we can avoid capital expenditures of about $1 billion to $1.5 billion per assembly plant, and save months or even years compared to developing an all-new site,” Barra wrote.

But GM has said it will build a new EV truck plant in the U.S. and two more battery plants by mid-decade. It has not released further details on those plans.

GM and partner LG Electronics are building two battery plants currently as part of their joint venture, Ultium LLC. The plants, each of which cost about $2.3 billion to build, will be in Lordstown, Ohio, and Spring Hill, Tenn.

GM already has tagged the following plants for EV production:

  • Orion Assembly in Orion Township, which currently builds the Chevrolet Bolt EV and Bolt EUV.
  • Factory Zero in Detroit and Hamtramck to build the GMC Hummer EV pickup and SUV, Cruise Origin and Silverado E.
  • Spring Hill Assembly in Spring Hill, Tenn., to build the Cadillac Lyriq SUV.
  • CAMI in Ontario to build BrightDrop EV delivery vans.

Ramos Arzipe Assembly in Mexico to build batteries and electrical components starting later this year.

Barra has emphasized that no hourly workers will lose their jobs in the transition to electric, and GM continues to hire salaried employees who have a background in technology and digital software.

As the Free Press reported in May, GM has started the GM Automotive Manufacturing Electrical College to train existing and new employees in how to build EVs.

After GM starts production of the Hummer, it will next start delivering the 2023 Cadillac Lyriq all-electric SUV to customers next spring, Barra told Wall Street.

RoadSigns

In this episode, host Michael Freeze asks, how are companies saving money by leasing trucks rather than owning? For answers, we speak with Jim Lager of Penske Truck Leasing and Al Barner of strategic fleet solutions at Fleet Advantage. Hear a snippet above, and get the full program by going to RoadSigns.TTNews.com.

In January, GM will reveal the Chevy Silverado E pickup at CES in Las Vegas. Barra said, “Our dealers love it.”

Later, Chevrolet will introduce an electric crossover priced around $30,000 “that will underscore our commitment to field the best and broadest EV portfolio in the business, with entries from affordable, high-volume segments up to the top of the line.”

When asked how GM will be able to widen current EV profit margins, Barra said improvements in batteries will remove costs and increased EV sales volume will help boost profit margins.

“Then there will be revenue from services we’ll get once we sell the vehicle,” Barra said. “We are working on that plan quite aggressively.”

Barra also said GM is “pretty confident” that its self-driving car subsidiary, Cruise, can remove the driver from its vehicles some time next year.

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