GM begins to transition to electric vehicle production

By Luis Mendez. June 2021

General Motors announced an investment of more than 1,000 million dollars to fully enter the production of electric vehicles in 2023.

Coahuila is one of the leading states in the manufacture of auto parts nationwide; the quality of the workforce distinguishes it as one of the most competitive entities in the sector and its geographical location places it as one of the most competitive entities for export.

This series of characteristics has been decisive in receiving investment from companies that want to be closer to their customers in North America; On the other hand, some of the assemblers located in the region choose to expand their operations due to the advantages they have found in this place.

General Motors (GM)  and Stellantis are the two manufacturers of light vehicles that are located in Coahuila. Apart from them, there are about 300 automotive companies, of which 150 are Tier 1 and the rest are divided into Tier 2 and 3.

With such strong activity in the automotive industry, it is essential to have a competitive supply chain ready to adapt to new ideas.

Recently, General Motors announced an investment of more than 1,000 million dollars in the Ramos Arizpe manufacturing complex to inaugurate a paint plant, which should be fully operational by the second half of 2021. It will have innovative technology and It will be preparing to fully enter the production of electric vehicles in 2023, as well as batteries and components to drive this type of unit.

Part of the initial amount will also serve to prepare the site for an expansion of the assembly plants and Global Propulsion Systems (GPS), with the objective of converting the Coahuila complex into the fifth manufacturing site of GM North America in producing electric vehicles.

The transition to electric car manufacturing could mean a watershed for the region. According to Fabiola Aguilar, director of the Coahuila Automotive Industry Cluster (CIAC), the value chain must be prepared for this challenge.

In theory, the manufacture of this type of unit is less complex in mechanical terms, so they have a reduced number of components, which could mean that they reach 52% of the total value of traditional cars.

He considered that chambers, industrial clusters, and state authorities should implement a series of strategies in order to increase the competitiveness of the value chain, which until now enjoys prestige even at an international level for the quality of its products and services.

“This change especially forces companies that currently produce components such as radiators, fuel injection systems, exhaust systems, among others, to adapt to the new requirements that will form the new value chain,” said the interviewee.

Encouraging the growth of the value chain and digitizing its processes, will be the beginning to enter a stage and can have better control of their inventories to be able to supply the plants in the assembly of electric vehicles.

The implementation of this new process represents a great opportunity for Coahuila to reaffirm its competitiveness in the automotive industry with the implementation of this new process. The production of electric cars is an issue that has gained ground worldwide: experts indicate that the future is going in that direction and the large car firms will bet on that market in the coming years, said the CIAC board.

“The advantages of Coahuila will remain the same, General Motors could have considered the geographic location and the highly qualified and reliable workforce that they have in Ramos Arizpe. With the infrastructure being prepared in the state, Coahuila could become one of the most important distribution centers in Latin America. The change will be gradual, that will give time for the companies to make the corresponding engineering changes and face the development of their new products ”.

Fabiola Aguilar highlighted that Coahuila is a national leader in the production of auto parts with approximately 17% of the total value in Mexico, GM’s investment will bring out the capacity of local suppliers, which will allow it to sell to the assemblers inside and outside of Mexico.

Regarding the development that suppliers should have in this type of process, he said that auto parts need a little more dedication due to the style of the vehicles, so now the packaging, dollys, or rax will have to adapt to the peculiarities of the parts. for export.

HUMAN CAPITAL SHOULD BE PREPARED

The director of the Cluster considered that human capital is one of the most important parts to be able to carry out new processes; their preparation will be decisive to adapt to them. He affirmed that the workforce in Coahuila has become a prestige for its high efficiency to carry out certain production numbers, it has even been a factor that weighs on the arrival of new projects.

“In the state, there is a strong automotive vocation, which represents a huge advantage. The technological capacity that is available makes it easier to make the necessary changes in the production models. Currently, there are 163,000 employees who have enough knowledge to adapt to the changes in this industry ”, detailed the directive.

General Motors estimates that it will produce and sell only electric units by 2035, among its first models it intends to manufacture the Hummer and 30 other vehicles that are the most iconic for the brand; since 2010 they have become pioneers in this area with the introduction of the Volt to the market.

VARIOUS FACTORS WILL CHANGE

Mario Hernández, president of the Association of Industrialists and Entrepreneurs of Ramos Arizpe (AIERA), said that the manufacturing industry has been the main engine of development in Coahuila during the last 40 years, a period in which the arrival of General Motors occurred. to the region and the supply chain was promoted as one of the strongest at the national level.

With the emergence in the manufacture of electric cars in Coahuila, the production of auto parts will have to prepare the ground to adapt to these new ways of working.

“Transforming processes is something that will be more common, that has to be done for competitiveness issues. Companies seek profitability and consolidate in their category to gain market. Among the main benefits to the population is to continue with the generation of formal jobs, ”said the AIERA executive.

In this context, Mario Hernández assured that manufacturing in Coahuila will go to the next level, considering that some auto parts will be produced with a higher degree of difficulty, so the educational part is another branch that will work to adapt to the new era in assembly. vehicular.

He said that the preparation of technicians should continue on the same path since the educational sector knew how to meet the demands of the business sector when it was heading towards the adoption of Industry 4.0 and surely soon there will be new careers in technical schools or universities focused on the manufacture of electrical units.

Finally, the interviewee stressed that in Coahuila progress is being made towards new technologies that facilitate work, since for some months some companies have automated their production lines and some other tools of Industry 4.0, to which he emphasized his I want to see the state’s automotive industry at the forefront in this matter in the future.

Source: Mexico Industry