In a bid to get important products to the market faster, General Motors accelerated the timetables for its billion-dollar investments in CAMI Assembly and Oshawa Assembly, highlighting the importance of those two factories to the automaker’s product plans.
GM also has taken unusual steps to get those plants up and running sooner.
In July, GM confirmed that German supplier Kuka AG would handle initial production of its new EV600 electric commercial van at a plant in Michigan in an effort to fulfill an order from FedEx. The automaker will then end production of the Chevrolet Equinox at CAMI in April and begin full EV600 production there in November 2022, about a year earlier than originally planned.
Kuka is expected to build fewer than 500 EV600 models by hand starting in October. After that, Kuka, which supplies assembly equipment to GM, will ship the equipment needed to make the EV600 over to CAMI. Doing so will “dramatically reduce the time needed to convert” the plant, GM Canada said in a statement.
“It’s a unique situation because [GM is] launching new products in a new market,” said Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions LLC. “Electric commercial vehicles haven’t been done, and they’re looking to get them out as soon as possible.”
‘NEED IT FAST’ AT OSHAWA
GM also recently moved up the timetable to begin pickup production at Oshawa Assembly from the beginning of 2022 to the fourth quarter of 2021. The automaker has signaled that it advanced the timetable in part as a response to the global microchip shortage, which has hampered new-vehicle production worldwide, and to the resilience of pickup demand in North America.
“Anything we can do to get this product up and running sooner rather than later has always been on our minds,” GM Canada President Scott Bell said on the May 7 edition of the Automotive News Canada podcast. “Right now, we need what we [build] in Oshawa, and we need it fast.”
A request to interview Bell in July was declined.
Just as at CAMI, GM is shipping equipment and machinery for Oshawa from Michigan. COVID-related border shutdowns forced the automaker to get creative to hit its production timelines, Bell said.
“We’re building replicas of the plant and the body shop in Detroit and shipping parts across the border and reassembling them here,” he said. “There’s a lot of activity that’s all new to this group, but I would say a combination of our experts in Detroit as well as the folks on the ground here in Oshawa are really coming together to make this happen.”
The plant investments and GM’s plans for the EV600 are excellent for the plant and its 1,500 hourly workers in the long term, said Mike Van Boekel, chairman of Unifor Local 88.
The plant has been shut down for large portions of the year due to the microchip shortage. Oshawa currently builds the Chevrolet Equinox crossover, which is also assembled at factories in Mexico.
GM plans to begin mass EV600 production at CAMI on one shift in November 2022, increasing that to two shifts in 2023 and, potentially, three in 2024, depending on market conditions.
“It’s great for job stability,” said Van Boekel, whose union represents about 1,500 workers at CAMI. “It’s just that the next year and a half is going to be a bit of a rough speed bump” until the investment is complete.
Though GM has taken unusual approaches to the CAMI and Oshawa investments, the advanced timetables show the automaker’s commitment to those projects, said Fiorani of AutoForecast Solutions.
“Nobody’s really tapped into the commercial market yet for electric vehicles, and GM would like to be the first,” said Fiorani, referring to the CAMI investment. “It looks really good on GM to step up and make sure that the market knows that they’re on top of the changing industry.”
Still, long-term questions linger about CAMI — namely, when it comes to how large of a customer base GM will find for the EV600 and how it will compete against companies such as Ford and Rivian in the coming years.
“We don’t know what’s on the other side of this,” Fiorani said. “If GM is correct and there are so many clients out there waiting to take an electric van along with all the other commercial applications for electric vehicles, this will be great for Ingersoll [Ont., where CAMI is situated]. Unfortunately, we don’t have those answers. ...
“The potential is great for Ingersoll, but the downside is great as well.”
GM has estimated that the U.S. market for parcel and food delivery vehicles will climb to more than US$850 billion ($1 trillion) by 2025. In June, the automaker boosted spending on electric and autonomous vehicles by about 30 per cent to US$35 billion ($43.6 billion) and accelerated plans for two U.S. battery cell plants.