General Motors makes a $1B commitment to next-gen ICE vehicles

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General Motors Company (NYSE:GM) announced plans on Monday to invest more than $1B in two of its manufacturing sites in Flint Michigan.

The Detroit automaker plans to prepare the Flint Assembly and Flint Metal Center plants for production of the next-generation internal combustion engine heavy-duty trucks. The investment is seen enabling GM to strengthen its industry-leading full-size truck business.

General Motors (GM) said the investment bolsters its U.S. manufacturing operations, which include more than 50 assembly, stamping, propulsion and component plants and parts distribution centers nationwide. It also said to highlight the company’s commitment to continue providing customers a strong portfolio of ICE vehicles for years to come.

GM will invest $788M to prepare the Flint Assembly plant to assemble next-generation ICE HD trucks. Plant updates will include a body shop building expansion, general assembly conveyor expansion, and new tooling and equipment. At the Flint Metal Center, GM will invest $233M for new stamping dies to support production of GM’s next-generation ICE HD trucks, as well as press refurbishments and new equipment.

"When business is booming as it has been for the past decade — due to the hard work of UAW members — the company should continue to invest in its workforce,” said Mike Booth, UAW vice president. The timing of the GM announcement come ahead of crucial negotiations later in the summer between the Detroit automakers and the UAW on a new contract.

Shares of General Motors fell 0.70% in morning trading Monday.

More on General Motors:

• A Deep Dive Into General Motors' Uncertain Future
• More articles from Seeking Alpha analysts
• Financial comparisons to General Motors' sector peers
• Seeking Alpha's Quant Rating for General Motors

Comments

[Tdot]

... For heavy duty trucks, much like Ford's strategy to keep some ICEVs in play even to mid-century.

[John_zhang ming]

Many visionary fund companies have recently invested the charging sector leader in China

[RickJensen]

@John_zhang ming
Most people outside of China will no longer invest in China. And if China starts to act badly, their economy will get crushed.
Not worth the risk.

[vqx41776]

In my opinion, we should invest in the charging sector because the trend is toward the development of NEVs.

[vqx41776]

GM's investment of $1 billion to revive fuel vehicles is confusing.

[John_zhang ming]

good

[John_zhang ming]

GM's investment of $1 billion to revive fuel vehicles is confusing. In my opinion, we should invest in the charging sector because the trend is toward the development of NEVs.

[clcellve]

Keep in mind that hydrogen is internal combustion, and zero emission. It's easy to change a gas/diesel engine to a hydrogen engine - form, fit, function, interface - one day diesel truck, the next day off the line comes a hydrogen truck. Investing a billion in "ICE" trucks makes sense.

And GM trucks will be equipped with GM autonomy, at some level. Highway autonomy is easy, city not so much, but in 2-4+ years, why not? GM has Ultra Cruise coming, and has Cruise - it's not a big leap to offer autonomy in large trucks, especially in repeat routes, and a lot of trucking goes back and forth in routine, repeated, supply chain routes.

A billion in trucks makes perfect sense - just add a little thinking that involves looking down the road (so to speak) a little - think about what's coming. That's what CEO's get paid to do, and that's how successful investors make money....

[Randy Carlson]

...and Tesla makes similar investments in battery-electric Class 8 trucks. Oh, and even more investment in battery electric pickup trucks...

Maybe that has something to do with the differences in market-cap. But who can say?

[Agile Trader]

@Randy Carlson

Hopefully, Tesla is increasing its investment in FSD.

"Tesla Full Self Driving (Beta) — 1st Notable Improvement In 1½ Years"
by Zachary Shahan, CleanTechnica director, chief editor, and CEO

cleantechnica.com/...

Elon, on the other hand, continues his "Tomorrow, Tomorrow" refrain:

Tesla Will Have Its “ChatGPT Moment” With Full Self-Driving Cars, Says Elon Musk

[eeeW]

@Agile Trader musk is forever a huckster on FSD

[6BQ5]

@Randy Carlson Elon will bring GM to its knees. Ford saw it coming and got down willingly.

[J2568]

Smart move. That industry leading full-size truck business pays a lot of bills.

They are whistling in the wind, but they are also trying to develop a little more positive narrative for the workers heading into the UAW talks

[Agile Trader]

GM is making these investments to protect its high-margin full-size truck business. U.S. states, including California, are not banning ICE vehicle sales until 2035.

“Full-size Truck U.S. Sales Report for 2022: GM Is Still On Top, Ram Slides Down – Here Is What Happened”

tfltruck.com/...

“Sales: Full-size Pickup Trucks Have a Bad Year in 2021 – GM Trucks Are Still On Top”

tfltruck.com/...

[Chris Linn]

Maybe they realized that the people who are excited about BEVs wouldn't be caught dead in one of their vehicles.

[RickJensen]

Mary can't seem to make up her mind.
"Oct 1, 2021 — General Motors said Thursday that it would phase out petroleum-powered cars and trucks and sell only vehicles that have zero tailpipe emissions"
--Is this like when Cruise fired all those engineers, so that they could double down on growth?

So now they are spending 1B, so that they can "phase out". Maybe they should spend 2B so they can phase out twice as fast.

[sam026]

@RickJensen
So it's all or nothing not do both?

[RickJensen]

@sam026 If you are going to exit, exit.
Investors need to see you carry through on what you say you will do. And if you change your mind, do it as quickly as possible and explain why.

[sam026]

@RickJensen
Let's see 80% market share ICE, 20% EV or 100% both. Boy, tough call Rick.

[TPizback]

"It also said to highlight the company’s commitment to continue providing customers a strong portfolio of ICE vehicles for years to come."

But .. but .. but ... ICE vehicles will be banned from sale by 2030, no more fossil fuels, this sounds like a foolish investment of capital to me.

Drill Baby Drill !