GM Bets a Billion Dollars on SUVs Amid Low Gas Prices
The Detroit Free Press reports that General Motors is planning an expansion of its main SUV plant in Arlington, Texas, to crank out more high-dollar Chevrolet Tahoe and Suburban, GMC Yukon and Yukon XL, and Cadillac Escalade sport-utility vehicles. Combined, the three brands have seen their full-size SUV sales jump 51 percent in the first three months of this year versus the same period last year.
Related: Gas Prices Hit New High for 2015
According to reports, GM would invest $1.2 billion in the 60-year-old truck facility, pursuant to the local city council granting a 10-year package of tax incentives. The expansion would add 500 to 600 workers, and it would provide $300 million in building updates and $1 billion in new equipment. Thanks to the rekindled popularity of GM’s SUVs, which is due to a widely praised update and lower gas prices, the plant could use some additional help: It has been running three shifts for six to seven days a week.
The news coincided with President Barack Obama’s remarks that the domestic auto industry should “build more fuel-efficient cars.” The reality, though, is that the Detroit Three are building the most fuel-efficient vehicles in their history, but buyers are opting for trucks and SUVs instead. Ford recently announced the elimination of one shift and 700 layoffs at its Focus plant in Wayne, Mich., due to slow sales of the fuel-efficient compact car. But the company can’t keep up with demand for its newly redesigned F-150 pickup truck.
