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GM plans to increase pickup truck production with up to $1 billion investment in Canada

General Motors plans to significantly increase production of its highly profitable pickup trucks by investing up to $1 billion in its Canadian operations.

The investment is part of a tentative deal with Canadian union Unifor, GM CEO Mary Barra told investors Thursday during the company’s third-quarter earnings call. The investment is pending union member ratification in the coming days.

“We can’t build enough,” Barra said regarding the trucks. “We will move very quickly. We expect construction to begin on the new body shop and flexible assembly module at Oshawa immediately upon ratification.”

GM expects a “significant increase” in its full-size pickup truck capacity when the plant comes online in January 2022, Barra said. She declined to disclose other details before the deal’s expected ratification.

The investment includes 1 billion ($767 million) to 1.3 billion Canadian dollars ($997 million) at Oshawa Assembly in Ontario with expected hiring of 1,400 to 1,700 hourly workers; CA$109 million in its St. Catharines powertrain plant; and CA$500,000 ($383,535) in operations in a parts distribution center.

Barra earlier in the morning told reporters that GM expects demand for its pickups and SUVs to continue to grow as U.S. vehicle sales continue to recover from the coronavirus pandemic.

“We just keep seeing demand for trucks continue to grow. It’s a permanent,” she said during a media call. “As the market recovers, we’re going to see strong truck growth and strong truck demand and market share. That definitely fuels our business.”

Sales of such vehicles largely assisted GM in outperforming Wall Street’s earnings expectations in the third quarter, including a 15% North American operating profit margin – the highest of the Detroit automakers.

 The profits from truck sales allow GM to invest in emerging, yet unprofitable, segments such as autonomous and all-electric vehicles. The company is in the process of investing $20 billion in the segments through 2025.

The Oshawa facility has been operating as a parts supplier to other GM plants following vehicle production ending in December 2019. The facility previously assembled passenger cars and assisted in partially producing previous generations of GM’s Chevrolet Silverado and GMC Sierra pickup trucks.

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