GM Official Says USMCA Won't Bring Wide Changes to Manufacturing Footprint
Everett Eissenstat, senior vice president of global public policy at General Motors, told the Center for Strategic and International Studies that the stricter rules of origin in the U.S.-Mexico-Canada Agreement won't “change the whole dynamic” of siting decisions but will be taken into consideration.
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“The rules of origin, I don’t think, are going to fundamentally change our footprint as it currently exists,” Eissenstat said on the June 18 webinar. General Motors has 11 vehicle assembly plants in the U.S., along with 10 engine plants; two vehicle assembly plants in Canada; and three in Mexico.
He said that GM invested in Orion, Michigan, for operations that require 400 workers, to comply with the labor value rules of origin.
The webinar's moderator asked Eissenstat and Alliance for Automotive Innovation CEO John Bozzella if they think as a result of the COVID-19 pandemic, companies will shorten their supply chains. Bozzella said rationalization of supply chains is “not a significant trend yet, but is moving in this direction.”
He added, “certainly the U.S.-China tariff dynamic makes shorter supply chains make more sense.” But Eissenstat disagreed. He said there's a need for resilience -- not single-sourcing critical components -- rather than more concentrated geography. “I don’t know if shortening is how I would describe it,” he said. “Just because you’ve shortened doesn’t mean you're not going to have a disruption.”