GM to invest $500 million in new Cadillac Escalade, other SUVs

Detroit – general motors It plans to invest more than $500 million in a plant in Texas to prepare the facility for the production of next-generation, highly profitable large SUVs.

Detroit automaker Thursday said The investment will include new tools and equipment in the Arlington Assembly stamping, body shop and general assembly areas for gas and diesel Cadillac Escalade, Chevrolet Tahoe/Suburban and GMC Yukon/Yukon XL SUVs.

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This investment is further confirmation that the company plans to continue spending on its traditional operations to help fund its emerging electric vehicle business.

On Monday, General Motors made a similar announcement about its next-generation heavy-duty pickup, which shares a frame with the large SUV. The Trucks investment included more than $1 billion in two plants in Michigan to produce the next generation of heavy-duty trucks.

Remarkably profitable vehicles remain in high demand, and sales are needed to help fund the automaker’s investment in electric vehicles. The company has said it plans to offer consumers exclusively electric vehicles by 2035. The automaker recently confirmed an all-electric version of the Cadillac Escalade but declined to disclose when the car will be introduced to the market.

Full-size SUV sales totaled more than 279,000 vehicles last year, accounting for about 12% of the automaker’s sales and a notable amount of its profits.

The investment announcements come ahead of contract negotiations between Detroit automakers, including General Motors, and the United Auto Workers union this summer.

For investors, UAW negotiations are usually a short-term headwind every four years that drives up costs. But this year’s negotiations are expected to be among the most contentious and critical in recent memory, fueled by a years-long organized labor movement across the country, a pro-union president and an industry transition to all-electric vehicles.