General Motors
is all in on electric vehicles, and the plant that is making some of the newest EV models reflects that belief, as well as some of the changes EVs have brought to the company.
Barron’s took a tour of the plant, dubbed Factory Zero—GM’s (ticker: GM) first plant dedicated to nothing but EVs. If attitude and excitement count for anything then GM will be a serious EV competitor to
Tesla
(TSLA), or anyone else for that matter.
The plant straddles Detroit and Hamtramck, Mich. The Zero name reflects GM’s vision for an automotive future with zero emissions, zero accidents and zero congestion. The emissions component comes from EVs. Accidents and congestion gains come from GM’s autonomous-driving investments.
The plant has a distinctly American feel. There are American flags, and the fact that the plant is making pickup trucks. Right now, Factory Zero makes the all electric GMC Hummer super truck. That 9,000-pound behemoth costs about $110,000, and comes with 1,000 horsepower.
Those aren’t the only reasons, though. Plant manager Jim Quick, who gave us a tour, started out on a GM assembly line. That feels like an American success story. Now Quick is leading the plant through a significant rebirth, like the two cities that surround it.
Closed at the end of the past decade, Factory Zero is producing vehicles again while significant construction continues apace. The facility has a “just get it done” vibe. And while plant looks like it was built in the 1980s, the technology inside is definitely not old school.
The factory essentially begins with a body shop equipped with 1,500 robots. After the body is assembled comes paint. From there GM has adjusted its manufacturing a little, making it more flexible. Fanning out from the paint stage are module, or mod, lines for final assembly.
These are general assembly finishing lines. Having more lines provides more flexibility than older plants that were dedicated to one or two models. What’s more, the lines can be changed to accommodate different products more quickly and with less capital.
Eventually the plant will have about six separate mod lines, up from two now.
Tooling is also a little different than in the past. Instead of pneumatic tools, most everything is electric. And the tools are wirelessly tethered to stations so there can’t be any errors introduced by using the wrong tool in the wrong spot. Outside of a specific station, a tool just doesn’t work.
There are about 40 stations on the Hummer mod line where workers are performing a ballet of tasks. Wiring harnesses go in, then trim, batteries, electric motors, and tires, and so on. Each station stop is about seven minutes.
Before the 3,000-pound battery pack is bolted into place, the Hummers travel on autonomous trolleys. After the vehicles are picked up to bolt batteries, about half way down the finishing line, the trolleys drive themselves back to the start like large, orange Star Wars droids.
At the battery station, until the tires are on, the car is suspended in the air. The tires, which have an outer diameter of 35 inches (that’s big), along with the drive units—which are essentially the axels, suspensions, and electric motors—are assembled outside GM at what Quick calls VAAs, or value-added assemblers.
Eventually, finished Hummers roll off the line.
Factory Zero, for now, is operating with one shift and has about 700 workers in the plant. The Hummer mod line is the only one producing vehicles for customer delivery. A second mod line is up and producing Hummer SUVs in initial test quantities. Not too long from now, all-electric Chevy Silverados will start being produced. The Silverado is due to be shipped to customers in early 2023.
The plant, and the new EV models, are key to GM’s strategy. The company plans to sell 400,000 EVs in North American, cumulatively, in 2022 and 2023. By 2025, GM wants to be selling one million EVs annually in North America.
It will take more models to hit that goal. Right now, GM sells the Bolt and the Hummer. The Cadillac Lyriq arrives later in 2022. Then come the Silverado as well as the Chevy Equinox and Blazer crossovers in 2023.
The lineup, and Factory Zero, will be key to the long-term success of GM stock. CEO Mary Barra says she believes EVs are rapidly becoming better, more functional vehicles than conventional cars, and that the EV penetration of new-car sales in North America could be up to 50% by 2030, up from 5% in 2021.
That’s still a long way away, and for now investors are more concerned with inflation, and rising rates, which can squeeze profit margins and cool demand for new cars. GM stock is down roughly 35% year to date, worse than the 13% and 9% comparable, respective drops of the
S&P 500
and
