General Motors’ stock experienced a boost before the stock market opened following their announcement of a new investment strategy. The automobile giant has revealed plans to allocate $4 billion to transition certain production lines from Mexico back to U.S. manufacturing plants, a move designed to navigate tariff challenges that have the potential to increase costs.
In a recent policy shift, President Trump signed executive orders that eased some of his administration’s previously implemented 25% tariffs on automobiles and auto parts. This significant policy change came as the high import taxes were posing a threat to domestic manufacturers’ competitiveness.
Both automakers and independent assessments have noted that such tariffs could escalate vehicle prices, diminish sales, and make U.S.-based production less viable on the global stage. President Trump has described the revised tariff strategy as a transitional measure, encouraging automakers to increase production within the United States.
On Tuesday, GM announced plans to invest in both its gas-powered and electric vehicle lines over the next two years. The investment will involve shifting production of the Chevrolet Blazer and Chevrolet Equinox from Mexico to American plants by 2027. The Blazer will be produced at GM’s Spring Hill, Tennessee facility, while the Equinox will be manufactured in Kansas City, Kansas.
Additionally, GM plans to produce gas-powered full-size SUVs and light-duty pickup trucks at its Orion Township, Michigan plant. This site was initially set to focus on electric vehicle production, but priorities shifted due to a decline in demand for electric cars.
With this new investment, GM aims to bolster its U.S. assembly capacity to more than 2 million vehicles annually. CEO Mary Barra emphasized GM’s commitment to building vehicles domestically and supporting American employment in a statement issued on Tuesday.
GM’s expansive U.S. operations include 50 manufacturing plants and parts facilities across 19 states, with a total of 11 vehicle assembly plants. The company claims that nearly 1 million individuals rely on them for employment, encompassing direct employees, suppliers, and dealers.
Though GM recently adjusted its profit forecast for the year, partly in anticipation of potential tariff impacts estimated at up to $5 billion in 2025, they now project an adjusted earnings range of $10 billion to $12.5 billion before interest and taxes. This revised outlook accounts for its current tariff exposure of between $4 billion and $5 billion, which contrasts with the previous forecast of $13.7 billion to $15.7 billion in adjusted EBIT by 2025.
In light of these developments, General Motors Co. shares saw an increase of almost 1% in pre-market trading on Wednesday.