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The General Motors Toledo Propulsion Systems facility in Toledo.
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GM's Toledo Propulsion Systems delays launch of EV drive production, layoffs to continue

THE BLADE/KURT STEISS

GM's Toledo Propulsion Systems delays launch of EV drive production, layoffs to continue

General Motors has delayed by nine months the production launch of a much-ballyhooed electric vehicle drive at its Toledo Propulsion Systems plant on Alexis Road.

The nearly 1,400 employees at the plant learned of the delay at an all-employees meeting Wednesday morning, said UAW Local 14 President Tony Totty, who represents workers there. GM confirmed the new production schedule. 

The plan affects about 75 temporary employees still on layoff from the shutdown in April of the plant’s 6-speed transmission production line to make way for the new EV drive line.

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GM contractors are still building the EV production line, with a small group of hourly employees prepping for the launch, Mr. Totty said.

An aerial view from a drone of the GM Toledo Propulsion Systems, Dec. 15.
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“We pride ourselves on having great launches and the extra time always allows for the best launch possible,” he said.

GM last year pledged $760 million to make Toledo Propulsion its first plant to produce EV drives in the United States.

The delay in opening the line is the result of GM delaying the rollout of EV pickup trucks. In October, the automaker said it had pushed back until late 2025 the launch of its Chevrolet Silverado EV and GMC Sierra EV because of slower-than-expected consumer demand for EVs.

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Those pickups are to be built at Orion Assembly in suburban Detroit, a plant that will be dedicated to EVs.

Mr. Totty said the original schedule to launch the EV drive line in Toledo in the first quarter of 2024 was aggressive by retooling standards. He said the delay until the fourth quarter gives management and workers some breathing room to prepare for what will be a crucial product in GM’s ambitious EV product lineup.

“New technologies take more time to work out issues,” he said.

When the 6-speed transmission line was discontinued in April, about 100 temps were laid off, Mr. Totty said. But about 25 have been recalled and made permanent under the UAW’s new labor agreement with the Detroit Three as the jobs opened through transfers and attrition, he said.

The General Motors Toledo Propulsion Systems facility in Toledo on Tuesday, Oct. 3, 2023. THE BLADE/KURT STEISS
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When the 6-speed line went down, it was staffed by about 500 workers. Most were redeployed throughout the plant, where they make a variety of transmissions for nearly every GM vehicle. Only the 100 temps were laid off when the last of the popular 6-speed transmissions rolled off the line in Toledo.

In a statement, GM said Wednesday it informed Toledo Propulsion Systems employees that “it will retime the launch of the Electric Drive Unit at the plant to Q4 2024 in order to better align with Orion Assembly’s planned production schedule.”

“As previously announced, GM will retime the conversion of Orion to EV truck production to late 2025 to better manage capital investment while aligning with evolving EV demand,” GM said.

Ivan Drury, director of insights at auto shopping site Edmunds.com, said that the automakers miscalculated on the high side consumer demand for electric pickup trucks.

EV pickups, as the theory went, were going to revolutionize the segment by replacing gas guzzlers with zero-emission vehicles with excellent towing and other work capabilities, he said.

And Ford initially positioned the entry-level Ford Lightning to start in price at a hair under $40,000. But after several price hikes, the Lightning quickly was selling at $50,000 to $55,000, and that started putting off fleet owners who also have had to deal with high interest rates, he said.

Price and problems with charging and diminished range while towing have resulted in some buyer hesitation that GM, Ford, and others have begun to recognize, Mr. Drury said.

In addition to GM pushing back the Silverado and Sierra EV launches until late 2025, Ford recently announced that it was cutting Lightning production by half.

“The real-world problems are legit,” Mr. Drury said.

First Published December 13, 2023, 4:32 p.m.

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