General Motors is preparing to resume building vehicles in Mexico as soon as next week following the government’s approval for factories to restart, according to people familiar with the matter, positioning the automaker to restock low inventories of its lucrative pickups.
Reopening manufacturing facilities throughout North America is important for the Detroit 3 automakers and foreign brands that produce vehicles in the U.S. Carmakers rely on Mexico for critical parts and GM and Fiat Chrysler Automobiles manufacture trucks there that generate a big chunk of their profits.
GM’s three vehicle-assembly plants in Mexico, including a full-size truck factory in Silao, could start up as early as next week in compliance with conditions set by the government, said the people familiar, who asked not to be identified because the company hasn’t announced its plans yet.
Restarting pickup production in Mexico would be a big boost for GM. The automaker planned to ramp up output of its redesigned Chevrolet Silverado and GMC Sierra trucks last fall but was forced to halt output during a 40-day strike in the U.S. Then, just as sales momentum and inventory were building early this year, the COVID-19 pandemic hit and forced GM to shut down North American production in the middle of March.
GM also operates assembly plants in San Luis Potosi, which makes small crossovers including the Chevrolet Equinox, and Ramos Arizpe, where mid-size crossovers such as the Chevy Blazer are manufactured.
Mexico’s general health council on Wednesday added auto manufacturing, construction and mining to its list of essential activities, enabling those three sectors to resume operations starting May 18 if they meet certain safety protocols. GM believes its plants meet those standards and has shared its practices with local suppliers, one of the people said.
Many automakers will benefit from the country’s lifting of production suspensions, as about 80 percent of the wiring harnesses used in U.S.-made vehicles cross the border with Mexico, according to the Center for Automotive Research.
