American Axle projects its production could drop by as much as 35 percent as a result.

General Motors recently laid out its plan to invest more than $1 billion into plants to bring truck component manufacturing back to the U.S. Axles for the new GM full-size pickups will come from Michigan instead of Mexico, and create more than 450 jobs in the state, according to reports.

Unfortunately, that new investment by GM spells bad news for American Axle & Manufacturing Holdings Inc. headquartered in Detroit. The company will be losing part of its business to supply GM’s new full-size trucks, reports Automotive News. Chris Son, a spokesperson for the company, said that production at American Axle's Silao, Mexico, plant will be reduced to 65 percent, down from the 100 percent it produces today.

"We’ve known the direction of the program for about a year and a half," Son told Automotive News. "We’ve been aggressive in securing new business to backfill the existing capacity that would be idled (by GM’s insourcing)." The $1 billion investment in axle production and development of truck components is part of a larger $5.4 billion dollar investment GM announced in May of 2015.

Though the company has yet to say whether any jobs will be affected by GM’s decision, the Detroit supplier is "cautiously optimistic" that no lines at its Three Rivers, Michigan, plant will be idled as a result. This coming at a time when the company plans to open its $30 million Advanced Technology Development Center in Detroit later in the year.

GM, meanwhile, says that the money invested in the U.S. will "cover multiple new vehicle, advanced technology and component projects." The automaker will announce the specific sites getting the updates throughout the rest of 2017, but says that salaried jobs will be added in growing areas like Ford Worth, Texas, and Grand Rapids, Michigan, among others.

Source: Automotive News

 

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