General Motors (NYSE:GM)
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By Mike Colias
General Motors Co. said it will build a new autonomous vehicle at a plant in Detroit, solidifying its hometown as a hub of future technology as it bets big on driverless and electric vehicles.
GM will manufacture a self-driving people-mover for Cruise, its San Francisco-based autonomous-vehicle subsidiary, at the auto maker's Detroit-Hamtramck assembly plant, the company said Monday. GM said production of the vehicle would come "soon after" it starts building the new Cruise vehicle, an electric pickup truck, in late 2021.
Cruise last week revealed the driverless electric vehicle, called the Origin, a pod-like passenger shuttle with no steering wheel, pedals or other manual driving controls.
The factory was slated for closure before GM reversed course with a $3 billion overhaul plan, outlined in a new four-year labor contract in October that ended a 40-day strike at the company's U.S. factories by the United Auto Workers. GM said Monday the investment includes $2.2 billion at the factory site and a further $800 million in supplier investment and other related projects nearby.
About 900 workers at the factory will be laid off temporarily by late February as renovations begin. GM said most are expected to get work at other factory locations.
GM in late 2018 set plans to wind down the operation amid weak sales of several models built at the plant, including the Cadillac CT6 sedan and the Chevrolet Volt plug-in hybrid car.
Cruise and GM executives declined to offer a timetable for starting a commercial autonomous-taxi service. Cruise had targeted late 2019 for the start of an operation in San Francisco but backtracked, citing the need for more testing.
Autonomous-vehicle developers have scaled back plans over the past two years, in part because of stubborn technical challenges and uncertainty around regulations for self-driving vehicles.
For example, federal law doesn't allow vehicles on public roads without manual controls, such as steering wheels and brake pedals. GM two years ago applied for a waiver from the Department of Transportation for permission to put some of its Cruise vehicles into service. The department hasn't ruled on the request.
The plan to build the driverless Cruise vehicle at the Detroit-Hamtramck plant is part of a broader revitalization effort at GM's lone remaining Detroit factory, located just a few miles from the auto maker's skyscraper headquarters along the Detroit River.
The 35-year-old factory also will be the production site for several electric-truck models, making it the company's first assembly plant to make electric models exclusively. After an extensive renovation of the factory, the first model it is expected to produce is a battery-powered Hummer pickup truck that would mark a revival of the Hummer name after it was phased out a decade ago, people familiar with the plans have said. A GM spokesman declined to comment.
GM President Mark Reuss said the plant will build multiple electric trucks and sport-utility vehicles across different brands and price points. He said it isn't clear when electric-vehicle demand will take off, but GM must be ready when it does.
"Nothing happens by throwing a light switch, making the vehicles and then suddenly everybody adopts them," Mr. Reuss told reporters during an event at the factory Monday. "We have to plan for that adoption and that [electric] portfolio to eventually become the standard."
Detroit is in line for an infusion of auto-industry investment after decades of seeing the sector fade. GM's plant is a few miles from the site of a $1.6 billion Fiat Chrysler factory under construction that eventually will produce Jeep vehicles. It will be the first new vehicle-assembly plant in Detroit in decades.
Combined, the two projects are expected to create nearly 9,000 jobs in coming years, in a politically important state that President Trump narrowly won in 2016.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
January 27, 2020 15:25 ET (20:25 GMT)
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