An employee uses a flash grinder to polish the metal frame of a sport utility vehicle (SUV) on the production line at the General Motors Co. (GM) assembly plant in Arlington, Texas.
Matthew Busch | Bloomberg | Getty Images
Detroit- General Motors It plans to invest more than $500 million in a plant in Texas to prepare for the production of its highly profitable next-generation large SUV.
detroit automakers thursday said The investment will include new tooling and equipment in Arlington Assembly’s stamping, body shop and final assembly areas for the gas and diesel-powered Cadillac Escalade, Chevrolet Tahoe/Suburban and GMC Yukon/Yukon XL SUVs.
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The investment further confirms that the company plans to continue spending money on its traditional business to help fund its nascent electric vehicle business.
GM made a similar announcement Monday about its next-generation heavy-duty pickups, which share a frame with large SUVs. Truck investments include more than $1 billion in two Michigan plants to produce next-generation heavy-duty trucks.
The lucrative vehicles are still in high demand and sales are needed to help fund the automaker’s electric vehicle investments. The company said it plans to exclusively offer consumer electric vehicles by 2035. The automaker recently confirmed an all-electric version of its Cadillac Escalade, but declined to say when the car would go on sale.
Total sales of more than 279,000 full-size SUVs last year accounted for about 12% of the automaker’s sales and a sizable chunk of its profits.
This summer, Detroit automakers, including GM, made investment announcements with the UAW in contract talks.
For investors, UAW negotiations are typically a short-term headwind every four years, leading to higher costs. But this year’s talks are expected to be among the most contentious and important in recent memory, driven by a years-long organized labor movement across the country, a pro-union president and an industry transition to all-electric vehicles.