Why GM is Investing Almost $1 Billion in Combustion Engines While Others Go Electric
V8s may be disappearing, but GM's apparently aren't going anywhere
GM's been resolute, for the most part, on electrification. With the Silverado EV released and a mix of electric SUVs across the Chevy and Cadillac brands (Escalade iQ and Lyriq, Chevy Equinox and Blazer EV), the brand has committed harder than any other American automaker. That's not to say the automaker's commitment to internal combustion is gone, though. Tonawanda Propulsion, a GM-owned plant covering 190 acres and comprising three separate facilities, has received nearly $900 million in funding, securing over 850 jobs and production of GM's sixth-generation V8 engine.
The 2021 Chevrolet Tahoe rolls off the line at GM's Arlington Assembly plant.
A worker at GM's Bedford Casting Operations in Indiana Friday, Nov. 18, 2022. (Photo by AJ Mast for General Motors)
The investment is a 'new chapter' for the plant, but it's also a change of direction for GM
The investment is important to a lot of people. 'This investment marks an exciting new chapter for our plant,' said Tara Wasik, the plant's director. 'This is a testament to the hard work of the membership of Local 774,' said Raymond Jensen Jr. in an interview with local news. 'It's extremely important to the community, to the surrounding areas, and to New York State itself.' The impressive sum of $888 million will go towards new machinery, equipment, tools, and renovations as part of the more than $1.5 billion GM has invested in New York State in the last 15 years. It's also hardly the first time in recent memory that GM has extended the V8's lifespan. In 2023, GM invested $579 million in its Flint, Michigan production site. There, too, V8 production will continue to chug along.
CEO Mary Barra addresses the gathering during the grand opening celebration at the GM Factory ZERO EV assembly plant. (Photo by Rob Widdis for General Motors)
GM Oshawa Assembly Plant in Ontario, Canada
However, it doesn't account for the $300 million commitment made two years ago in union negotiations to produce electric vehicles, specifically at Tonawanda. And it's not the first area where GM has had to pump the brakes on EV endorsements. The company has sold off its stake in a battery production facility to its partner, LG Energy. In other areas, GM has pushed back against California's 2035 plan to eliminate sales of gas-only vehicles, which is now, by the way, completely dead. On the other hand, GM pushed into the number two spot for April EV sales, capturing nearly 15% of EV sales. Getting mixed signals? Us too, but we blame the current political and economic climate, not necessarily GM.
CEO Mary Barra emphasizes the importance of heritage and US jobs
Outfitting the plant for V8 production is important for CEO Mary Barra, too. 'Our significant investments in GM's Tonawanda Propulsion plant show our commitment to strengthening American manufacturing and supporting jobs in the U.S.,' she said in a press release. She further emphasized the plant's importance to the brand, citing its 87 years of operation. The plant will finish production of GM's fifth-gen V8 before commencing work on the sixth-gen product.
Final thoughts
This $888 million investment marks the largest single investment GM has ever made in an engine-producing facility. The fact that it happens to make V8s is almost irrelevant; it implies the combustion engine at large still has several decades of work ahead of it. GM isn't faring poorly in the EV arena, either, so unlike other automakers that have rekindled V8 production, this isn't a crutch. GM's going where the money is, and that's just good business.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
22 minutes ago
- The Independent
Air Force wants to buy Tesla Cybertrucks to blow up for target practice, report says
The Air Force is looking to buy Tesla Cybertrucks to blow up for target practice. The service was looking to buy two Cybertrucks to use as targets for precision-guided munitions, citing concerns that enemies may soon start to use them on the battlefield, according to federal contracting documents shared online. The Cybertrucks - made by Elon Musk's Tesla - are among 33 target vehicles that the Air Force Test Center is ordering for 'live missile fire testing' at the White Sands Missile Range in New Mexico. There are no other name-brand requirements for the other vehicles on the training center's shopping list, which also includes sedans, bongo trucks, pickup trucks and SUVs. According to the contract, the two Cybertrucks had to be towable, but not functional, and have all fluids drained before their delivery. The news of the request for Cybertrucks was first published by The War Zone. In a document detailing why the Tesla vehicles were specifically needed, the contract noted it was 'likely' that U.S. adversaries may start to use Cybertrucks on the battlefield. 'The type of vehicles used by the enemy may transition to Tesla Cyber trucks as they have been found not to receive the normal extent of damage expected upon major impact,' the document says. Musk, the Tesla CEO, claimed the Cybertruck was 'apocalypse proof' when he first launched the vehicle in 2023, but it was not immediately clear if the company would do anything to prevent the vehicles from getting into the hands of US enemies. Tesla and the US Air Force did not immediately return requests for comment from The Independent. News of the Air Force looking to conduct target practice on Cybertrucks comes two months after tech boss Musk and his longtime ally, President Donald Trump, had a very messy, public falling out. After Musk's time leading the Department of Government Efficiency came to a close in May, the two powerful men got into a very public fight that concluded with Musk issuing a grovelling apology, only to blow up again weeks later. After staging a farewell press conference in the Oval Office, Musk and Trump's relationship took a turn for the worst when Musk began to publicly criticize Trump's 'big, beautiful bill.' Trump went on to claim that Musk was 'wearing thin,' as the two men traded blows on their respective social media platforms. The brawl eventually concluded with Musk posting, without evidence, 'Time to drop the really big bomb. @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!' He later deleted the post.
Reuters
23 minutes ago
- Reuters
Bostic: Labor market risks rising, but a lot of data to come before September meeting
WASHINGTON, Aug 7 (Reuters) - Risks to the job market have increased, but it remains too soon to commit to interest rate cuts before the next meeting of the U.S. Federal Reserve with key data still to come and inflation still expected to rise in coming months, Atlanta Fed President Raphael Bostic said on Thursday. Bostic, in comments to a Florida business group, said he still felt a single quarter percentage point rate cut was likely all that will be appropriate this year, but "we're actually going to get a lot of data around inflation, around what's happening in terms of employment, that will allow me to think relative balance of risks between inflation and employment. The employment number did say that the risk on the employment side is much higher than it had been...I will definitely be looking carefully." The Fed next meets on September 16-17 and is widely expected to reduce the benchmark policy rate by a quarter of a point after holding it steady in the current 4.25% to 4.5% range for the last five meetings. President Donald Trump has insisted on deep and immediate rate reductions. Employment growth slowed and the unemployment rate rose in July, and new data from the Bureau of Labor Statistics showed a large downgrade to prior months' job gains, a development that led Trump to fire the head of the agency. Bostic said the size of the revisions had led him to rethink his view of the risks facing the economy, but that his concerns about inflation - and the uncertainty about coming tariff impacts - left his policy view unchanged for now. He said it may take until mid-2026 before businesses have fully responded to changes in tariffs, leaving risks to inflation unresolved. "My outlook for the economy is for it to continue to slow," Bostic said, but the issue of whether tariffs will cause only a one-time round of price hikes, or lead to more persistent price pressures, "is perhaps the most important question we have today." Some on the Fed, and most notably Governor Christopher Waller, a contender to replace current Fed Chair Jerome Powell, have said they don't see tariffs leading to steady price increases and argue that rates could begin to fall. Waller dissented at the last meeting in favor of a rate cut. Bostic said he was still concerned the tariff debate could reset public expectations in a way that boosts prices, and also noted that if tariffs do begin to reshape global supply chains away from low-cost producers like China, as the administration says it hopes, it could lead to structurally higher inflation. "Does the textbook model fit today's environment?" Bostic said, referring to economic models that show tariffs acting like a tax to change prices once, but not persistently. "I think there are reasons that are pretty compelling that suggest we should be somewhat skeptical about that." Still, he said, upcoming data will shape the near-term policy outlook. The Fed will receive new data on consumer prices next week, updates on other inflation measures later in the month, and a jobs report for August before the next policy meeting.
The Guardian
23 minutes ago
- The Guardian
‘The economics made it a challenge': CBS boss talks Stephen Colbert cancellation
After much media consternation and criticism over the cancellation of The Late Show With Stephen Colbert, CBS's CEO has spoken up about the company's decision to end the television institution after 32 years. Speaking at a press conference following the takeover of Paramount by the media conglomerate Skydance, George Cheeks, the chair of TV media at the company, attributed the cancellation to financial headwinds faced by the format. 'The challenge in late night is that the advertising marketplace is in significant secular decline,' he said. 'We are huge fans of Colbert, we love the show. Unfortunately the economics made it a challenge for us to keep going.' Cheeks added that as soon as Taylor Tomlinson, the 31-year-old former host of After Midnight, declined to return for another season in the slot formerly occupied by the Late Late Show with James Corden, he knew the network 'couldn't stay in that daypart'. 'I know [Skydance] is going to invest, but they're going to invest cautiously and wisely,' he said, indicating a focus on prime time and sports. Many had criticized the decision to cancel Colbert during a crucial window in the merger of Paramount and Skydance, which depended on approval from the Trump administration to proceed. The cancellation came just two days after Colbert publicly criticized his parent company's settlement with Trump over a 'frivolous' lawsuit regarding a 60 Minutes interview with Kamala Harris. During one of his monologues, Colbert referred to the $16m paid by Paramount to Trump a 'big fat bribe' to approve the $8.4bn merger. Colbert's announcement that his show would end next year was met with an outpouring of support from celebrities, as well as speculation that the decision was another effort by Paramount to appease Trump as well as the Skydance head, Larry Ellison, who has close ties with the president. But Cheeks asserted the decision was indeed financial, following reports that the Late Show, which premiered in August 1993 with David Letterman as host, was losing upwards of $40m a year. The late-night genre as a whole has faced significant financial challenges in recent years, with ad revenue plummeting 50% from just seven years ago. Cheeks declined to confirm how much the Late Show was losing, even as the ratings leader in the field for close to a decade, but said it was 'significant' and in the 'tens of millions of dollars'. 'At the end of the day, it just wasn't sustainable to continue,' he said. Cheeks, who came up in late night at NBC, also said that the timing for the decision came down to contract renewals for crew, including writers and producers. 'We were at a period from a production standpoint where every year seasonally, this is [when] we negotiate new deals for writers and producers,' he said. 'In addition, this is going to be the third season of Colbert's three-year deal. So, in order to do those deals, we were going to have to change the terms from what we traditionally are, September to August, to September to May. 'It was it incumbent upon me and us to make it clear to Stephen and his reps that this is where we were,' he added, noting that it was 'too early to speculate' on what might replace the program in the 11.35pm ET time slot. Colbert will continue to host the show four nights a week until April 2026.
