GM Spends to Upgrade Facilities Ahead of More Fuel Efficient Lineup
General Motors has announced nearly $460 million in upgrades to three of its Midwest manufacturing facilities in anticipation of a revamped, more fuel-efficient model lineup that has been years in the making. The improvements are part of a $2 billion commitment GM made several months ago to invest in its domestic plants over the next year and a half, and part of $3.9 billion in related spending the auto giant has made since emerging from bankruptcy in 2009.
Part of the money will go to plants in Toledo, Ohio, and Bedford, Ind., which will be allocated $129 million to retool their production lines for the forthcoming Chevy Malibu and Buick Lacrosse eAssist editions. The eAssist system is GM’s second go-round with mild hybrids, after a failed attempt to market expensive yet relatively ineffective Belt Alternator Starter vehicles as fuel-efficient alternatives in 2008. In 2009, Chevy discontinued the Chevy Malibu Hybrid model—which effectively gave drivers the option of paying nearly $4,000 extra for a mild hybrid system that only achieved 4 mpg better than its non-hybrid sibling. Unsurprisingly, car buyers were not impressed.
This time around, GM’s mild hybrids will offer a lot more bang for their buck. For just a 10 percent price premium, the new Buick LaCrosse eAssist will provide a 30 percent improvement in fuel economy, thanks to a 0.5-kWh lithium-ion battery and more powerful electric motor.
A substantial investment of $328 million will also be made upgrading GM’s Flint, Mich., plant in preparation for a remake of its large pickup line, which includes the Chevy Silverado and GMC Sierra models. Both vehicles are being retooled to provide improvements in fuel economy and power, with lighter vehicle weights and the inclusion of a new hybrid powertrain among the rumored updates. GM will have to contend with rising CAFE standards and competition from OEMs like Ford, whose F-150 EcoBoost model has shown early success as a more powerful, fuel efficient—and in the long run, likely more cost effective—alternative to the standard model. Ford says that its first month of availability, the EcoBoost model option accounted for 40 percent of F-150 sales.
GM says it can and will meet the next round of CAFE hikes—which could reach 56.2 mpg by 2025—but will need to continue to invest heavily in the technologies and production capabilities necessary to deliver on its promise.