General Motors (GM) has announced a $4 billion investment over the next two years to bolster its U.S. manufacturing operations, aiming to increase annual domestic vehicle production from 1.7 million to over 2 million units. This strategic move comes as the company seeks to mitigate the financial impact of recent 25% tariffs on imported vehicles and parts, and to reinforce its commitment to American manufacturing.
The investment will focus on upgrading three key facilities: the Orion Assembly plant in Michigan, the Fairfax Assembly plant in Kansas, and the Spring Hill Manufacturing plant in Tennessee. These enhancements will support the production of both gas-powered and electric vehicles, including next-generation V-8 engines and new electric models like the Chevrolet Silverado EV.
At the Orion Assembly plant, GM plans to commence production of gas-powered full-size SUVs and light-duty pickup trucks by 2027. This shift marks a departure from previous plans to focus solely on electric vehicle production at the facility, reflecting a broader strategy to balance EV and internal combustion engine (ICE) vehicle manufacturing in response to market demand.
The Fairfax Assembly plant in Kansas City is set to begin producing the gas-powered Chevrolet Equinox in mid-2027, with plans to start manufacturing the 2027 Chevrolet Bolt EV by the end of this year. This dual approach aims to cater to varying consumer preferences and to strengthen GM’s position in both the EV and traditional vehicle markets.
In Spring Hill, Tennessee, the manufacturing plant will add production of the gas-powered Chevrolet Blazer in 2027, alongside existing Cadillac EVs and SUVs. This expansion is expected to enhance GM’s capacity to meet the growing demand for SUVs and to support the company’s broader electrification goals.
GM’s CEO, Mary Barra, has expressed support for the recent 25% tariffs on imported vehicles, stating that they help level the playing field for U.S. automakers. “For decades now, it has not been a level playing field for U.S. automakers globally with either tariffs or non-tariff trade barriers,” Barra said at The Wall Street Journal’s Future of Everything conference. “I think tariffs are one tool that the administration can use to level the playing field.”
The company’s decision to invest heavily in U.S. manufacturing is also influenced by the potential financial advantages of President Trump’s proposed “One Big Beautiful Bill,” which includes provisions for tax-deductible interest on auto loans only for U.S.-made vehicles. This policy could make domestically produced GM models more appealing to buyers and further incentivize the company’s focus on American production.
In addition to the $4 billion investment, GM recently allocated $888 million to its Tonawanda Propulsion plant in New York for the production of next-generation V-8 engines. This move underscores the company’s commitment to maintaining a diverse product lineup that includes both traditional and electric powertrains.
The United Auto Workers (UAW) union has praised GM’s investment, viewing it as evidence that the administration’s automotive tariffs are effective in encouraging domestic manufacturing. UAW President Shawn Fain highlighted that the move would create thousands of union jobs and described the announcement as a positive development for the American automotive industry.
Despite the significant capital expenditures, investors responded positively to GM’s announcement, with the company’s shares rising by 2% following the news. Analysts suggest that the investment aligns with shifting trade policies and supports the reshoring trend encouraged by the current administration.
As GM navigates the evolving automotive landscape, the company projects annual capital spending of $10-12 billion through 2027. This sustained investment reflects GM’s strategy to adapt to market demands, manage tariff-related costs, and reinforce its commitment to American innovation and manufacturing expertise.
