GM bets on Mexico
Photo credit: General Motors by Michael Kumm
General Motors has outlined plans, which will look to invest over US$600 million for the expansion of their Mexican operations. This investment will facilitate new factories and upgrades to existing premises. The company announced that the investment is intended as a celebration of reaching 78 years working in Mexico. The investment will also provide additional employment opportunities and development within several regions, together with allowing the company to develop more advanced technology, which will be of that benefit to their customers.
While the company is investing heavily in Mexico, it has not neglected their US investments. GM have unveiled additional plans to invest over US$100 million to create an addition to the assembly/stamping plant in Wentzville, Missouri. The construction is estimated to allow third stamping press to become operational in the next two years. This will allow the creation or retention of 55 jobs.
These new investments support the earlier announced plans of GM to provide a renewed focus on the standards of quality. The company is also looking to strengthen their manufacturing production within Mexico. Mexico, which is ranked as the eighth largest producer of vehicles worldwide, is quickly establishing itself as a regional supply base for the automotive industry.
This is largely due to the numerous free trade agreements in place within Mexico and the well-educated and cheap labor force available, in addition to the proximity to the vast and lucrative market within the United States. GM currently employees 15,000 people in their four facilities and headquarters in Mexico City. It is the second biggest producer of vehicles in Mexico, second only to Nissan.
GM is looking to expand and update their facilities, together with a shakeup within the design team. This is a commitment by the company to work harder to establish a greater synergy between Buick and Opel. It is also looking to obtain better leverage for the costly resources for engineering in Germany, where many designs for Buick and Opel are developed.
The desired effect for the reshuffle within the company is to allow sorting out effective strategies for the Buick and Opel brands. These are currently marketed within the three largest markets in the world-Europe, China and North America. These shared platforms that utilize different designs have created complicated issues that GM is hoping to optimize.
Many experts are watching the Mexico auto manufacturing industry with great interest. The industry has seen vast sums committed from former foreign investors, a trend which looks set to continue into the future.