GM to spend $6.5 billion, add 4,000 jobs at two plants

General Motors (GM) is poised to announce next week major electric-vehicle investments in Michigan, with plans to spend $6.5 billion and create up to 4,000 new jobs at two plants.

The state’s economic development board is expected to approve an incentives package Tuesday, according to a meeting agenda posted online.

The Associated Press previously reported the Detroit automaker’s plan to partner in a joint venture to build a $2.5B electric-vehicle battery factory in the Lansing area, adding as many as 1,700 workers. GM also plans to spend $4 billion and create up to 2,300 new jobs by designating an existing plant in Orion Township as its third electric-vehicle factory, along with plants in Detroit-Hamtramck and Spring Hill, Tennessee.

The selections are a big win for Michigan, which missed out on three Ford Motor Co. battery factories and a Ford electric-vehicle assembly plant that will be built in Kentucky and Tennessee.

Michigan state lawmakers and Gov. Gretchen Whitmer recently enacted a new $1 billion fund designed to land major business projects.

“The Ford announcement felt like a punch in the nose,” Quentin Messer Jr., CEO of the Michigan Economic Development Corp. and president and chair of the Michigan Strategic Fund, said last month. “Michiganders have always responded to every punch with a more forceful counterpunch.”

The Orion Township plant, about 40 miles (64 kilometers) north of Detroit, now makes the Chevrolet Bolt electric hatchback and small SUV, employing just over 1,100 workers. The company has said that it would soon announce that an existing factory would build electric pickup trucks. Bolt production has been suspended due to a battery recall.

The battery plant will be constructed on the site of GM’s Lansing Delta Township Assembly factory, which makes the Buick Enclave and Chevrolet Traverse SUVs.

“GM appreciates the support it has received from the Governor, the State Legislature, Orion Township, the City of Lansing and Delta Township related to two prospective projects that GM is considering in Orion Township and Lansing,” company spokesperson Dan Flores said in a written statement. “Until these projects receive final approval, we have no comment on potential announcement timing,”

GM says it is also spending $154 million to revamp an aging factory near Buffalo, New York, so it can make a key part for electric vehicle motors.

Electric vehicles amounted to less than 3% of U.S. new auto sales last year, but forecasters expect big increases in the next decade. Consumers bought about 400,000 fully electric vehicles.

The LMC Automotive consulting firm estimates EV sales will jump to 763,000 this year and more than 1.2 million by 2023. The firm expects EVs to make up nearly 44% of new vehicle sales by 2033, with nearly 7.4 million sold.

Meanwhile, US Energy Secretary Jennifer Granholm on Friday flagged concerns about Mexico’s plan to tighten state control of the electricity market, saying it could impede investment and economic development in North America.

Granholm met President Andres Manuel Lopez Obrador and senior members of his Cabinet, including Energy Minister Rocio Nahle, on Thursday and Friday on a visit to Mexico City in which the Mexican power market initiative drew close scrutiny.

“In each meeting, we expressly conveyed the Biden-Harris administration’s real concerns with the potential negative impact of Mexico’s proposed energy reforms on US private investment in Mexico,” Granholm said in a statement.

“The proposed reform could also hinder U.S.-Mexico joint efforts on clean energy and climate.”

Granholm said competitive energy markets that benefit North America should be upheld, and that she had been assured Mexico is committed to supporting clean energy and working out current disputes with projects within the rule of law.

Officials, lawmakers and business leaders say in private they believe Lopez Obrador’s power market initiative will be watered down, but it is unclear by how much or whether it will be enough to restore bruised investor confidence.

Earlier, Lopez Obrador said his government would address future energy disputes with companies “case by case” as he took questions on the meetings with Granholm.

Lopez Obrador last year launched his constitutional reform https://www.reuters.com/world/americas/mexico-president-says-electricity-reform-has-been-sent-congress-2021-10-01 to boost state control of the electricity market, arguing it was a matter of national security https://www.reuters.com/world/americas/mexican-power-bill-us-sights-top-energy-official-meets-lopez-obrador-2022-01-20, and that past governments had skewed the market in favor of private capital.

The president, a leftist resource nationalist, has often couched his opposition to foreign and private participation in the energy sector as part of his drive to eradicate corruption.

“We were talking about all this, and (Granholm) understands that our mission is to banish corruption from our country as well as showing our openness to dialogue, and to go case by case,” he said, referring to potential disputes.

He acknowledged “a small number” of both U.S. and Canadian companies have complained, but did not name any.

Granholm said Mexico had so much potential renewable energy that if fully realized, it could power the country at least 10 times over, create millions of jobs, and develop an export industry geared for a world seeking clean energy solutions.

At an event with Granholm, Mexican Finance Minister Rogelio Ramirez de la O said Mexico would work with the rest of North America to lure manufacturing investment across the Pacific from Asia and reduce trade deficits.