GM Expects To Move 600 Supplier Jobs From Mexico to Texas
June 16 2017 - 02:03PM
Dow Jones News
By Mike Colias and William Mauldin
General Motors Co. said Friday it would open a supplier park
near its Arlington, Texas, sport-utility factory, resulting in the
relocation of about 600 jobs from Mexico to the U.S. and a higher
concentration of American-made parts in Chevrolet Suburbans and
Cadillac Escalades.
The decision comes as the Trump administration considers changes
to the North American Free Trade Agreement and as Republican
lawmakers weigh a border-adjusted tax, both of which could make it
more expensive for companies to import parts from abroad. Boosting
the number of U.S.-made parts could alleviate some trade risk for
GM's most-profitable vehicles, the hulking SUVs assembled at its
Arlington factory.
Analysts estimate that profit margins on the SUVs can exceed
$15,000. Any tariff on the trucks' components could pinch
profits.
GM is one of several manufacturers rethinking the wisdom of
shipping intermediate products through far-flung supply chains.
Once thought of as a strategy to lower costs, overreliance on a
global parts network is perceive to be a risky bet due to political
shifts, protectionist measures and even natural disasters.
The auto maker earlier this year announced plans to add about
1,500 factory jobs in the U.S. in the wake of public criticism from
President Donald Trump of GM's Mexican imports.
The company said both the 1,500 jobs and the 600 supplier jobs
were planned before Mr. Trump's election. The new supplier park is
aimed at trimming logistical costs and benefiting from of other
advantages that could result from proximity of parts to the
assembly plant, GM purchasing chief Steve Kiefer said in an
interview Friday.
Mr. Trump has set in motion a renegotiation of the 23-year-old
North American Free Trade Agreement, which has set the ground rules
for Detroit and foreign-based auto makers operating in the U.S.,
Canada and Mexico.
The SUVs assembled at GM's Arlington plant have among the
highest Mexican content of any vehicles produced in North America,
according to the National Highway Traffic Safety Administration.
The SUVs contain 49% U.S.-or Canada-made components, while 38% of
the parts come from Mexico, the agency says.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
June 16, 2017 13:48 ET (17:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Feb 2024 to Mar 2024
General Motors (NYSE:GM)
Historical Stock Chart
From Mar 2023 to Mar 2024