General Motors expects profits from its large, gasoline-burning pickups and SUVs will continue to support the transition to electric vehicles (EVs) for years.
The automaker recently committed $2 billion to building next-gen full-size pickups and SUVs, a move that guarantees the production of internal combustion-powered vehicles well into the 2030s.
Experts in labor suggest the investment is a move to bolster this year's contract discussions with unions in the U.S. and Canada. The company wants to ease concerns that workers in internal combustion factories will lose their jobs.
GM CEO Mary Barra says the automaker seeks a solution that's good for the company and its employees. The company, she says, is reinvesting in its plants to give workers job security. “To do that, the company has to be successful so we can continue to develop new products that customers want to buy,” she told Automotive News.
The profitability of GM is significantly driven by the production of large pickups and SUVs in Michigan, Texas, Indiana, and Ontario. General Motors has committed over $2.3 billion toward upgrading five plants in those states to produce next-generation full-size pickups and SUVs.
According to Automotive News, GM's executive vice president of global manufacturing and sustainability, Gerald Johnson, stated the plants will stay a priority for GM's internal combustion production, despite its goal to electrify its light-duty lineup by 2035.
The automaker's leaders expressed confidence in GM’s ability to train workers to produce EVs and parts, while still maintaining internal combustion production for years to come.
Full-size pickups and SUVs are critical vehicles because the profits they generate power the company's future investments, explained Paul Waatti, manager of industry analysis at AutoPacific Inc.
They're also some of the most difficult vehicles to make electric because of their size, he added.
"With all the headlines and focus on EVs and the surrounding investments, it's easy to think the transition is right around the corner," Waatti told Automotive News. "The reality is, it's a decades long transition, not a years-long, and nowhere is that more true than with full-size pickups and SUVs. They will definitely be among the last to go exclusively EV."
Originally posted on Auto Dealer Today