GM delays restart of Orion Assembly plant, will reopen it as battery-electric truck plant

General Motors is again delaying the restart of its electric vehicle factory in Orion Township as demand for EVs grows more slowly than previously projected.

On Tuesday, CEO Mary Barra told Wall Street analysts during a second-quarter earnings call that GM has "decided to reopen Orion Assembly as a battery-electric truck plant in mid-2026. The new timing is six months later than our plan heading into the year. We’re confident that we can meet customer demand for standout EV trucks in the interim by leveraging the production capacity and flexibility we have at Factory Zero."

At Factory Zero in Detroit and Hamtramck, GM currently builds the Chevrolet Silverado EV and GMC Hummer EV pickup and SUV. The plant had been building the self-driving bus-like Cruise Origin until last fall, when GM's self-driving subsidiary Cruise, halted all operations. On Tuesday, GM announced it would suspend Origin production indefinitely and opt to use the new Chevrolet Bolt as a Cruise self-driving car once Cruise fully resumes operations in Dallas, Houston and Phoenix.

Orion's changing timeline

GM idled Orion Assembly at the end of last year when it stopped making the previous-generation Chevrolet Bolt and Bolt EUV built there. GM will launch an all-new Bolt, using GM's Ultium propulsion technology, in 2025. That vehicle will be built at Fairfax Assembly in Kansas, and the self-driving version for Cruise will likely also be assembled in Kansas, GM CFO Paul Jacobson said Tuesday.

GM had decided to retool Orion to build the Chevrolet Silverado EV pickup and had planned to start production at Orion this year. But in October 2023, the automaker announced that it will "retime the conversion" of Orion Assembly plant to EV truck production to better manage its capital investment in EVs and to align the investment with evolving EV demand. It said it would restart the plant in late 2025 instead.

Then in December, GM filed a WARN notice that said it will cut 945 jobs starting Jan. 1 this year at Orion Assembly. About 1,000 other workers at Orion transferred to other GM facilities in the state. The restart was pushed back to late 2025/early 2026. Now the restart is slated for the middle of 2026.

As to when the workforce will be called back to Orion Assembly, GM spokesman David Caldwell said, "People from Orion will be able to transfer back to Orion per the terms of our national agreement. The exact timing is to be determined, and employees will get the details from their local leadership."

On Wednesday, the UAW clarified that 25 employees from Orion Assembly on indefinite layoff at this time. All others have transferred to jobs at other GM facilities. The 25 will receive offers to return to work in seniority order when GM restarts Orion Assembly.

GM adjusts spending to match demand

GM is sustaining its profitability largely on sales of gasoline-powered vehicles. On Tuesday, GM reported a 37% gain in its adjusted pretax income, to $4.4 billion, for the second quarter of 2024. Barra credited the results to strong sales of gasoline-powered pickups and SUVs, improving EV sales and stable pricing with low incentives.

But even as GM rolls out several new EVs this year, Barra emphasized GM's focus on managing its costs going forward due to slower-than-expected EV adoption rate.

“Over the next few years, third-party forecasters now see the EV market growing steadily but more slowly than it did over the last few years," Barra told analysts Tuesday. "As a result, we are adjusting our spending plans to make sure we’re capital efficient and moving in lockstep with customers."

Barra said GM's joint venture, Ultium Cells LLC, is ramping up domestic battery cell supply this year at its two locations: A plant near Lordstown, Ohio, and the other in Spring Hill, Tennessee, near the factory where GM builds the Cadillac Lyriq all-electric SUV. The two battery cell plants are helping GM "drive profit improvement in our EV portfolio," Barra said, noting that, "as we go forward, we're going to bring additional capacity online in a measured cadence."

"This will enable us to better optimize our battery chemistry and form factors to meet our customers’ needs on cost and range," Barra said.

GM taking parts out of cars

Around this time last year, Barra introduced a new corporate plan called "winning with simplicity." The strategy, she said, would "reduce design and engineering expense, supplier costs, order complexity, buildable combinations and manufacturing complexity."

On Tuesday, Barra told analysts the plan was working. As an example, she said GM has reduced the part count on the 2025 Lyriq by 24% compared with the 2024 model and did so without losing any features or quality. Having fewer parts reduces storage and hardware costs for GM, helping the company meet its target of $2 billion in total cost reductions by the end of this year and keep costs lower going forward.

Jacobson told analysts that sales of Ultium-based EVs to dealers outpaced deliveries to customers 2-to-1 in the first half, which he said is common as customers get acquainted with new products. But if that pace continues, GM will adjust production. As it is, Jacobson announced last month that GM would trim its targeted production of its new EVs in 2024 from between 200,000 and 300,000 to between 200,000 and 250,000 due to the slower-than-expected EV adoption growth.

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Barra said the Lyriq and next-generation Chevy Bolt represent the largest growth segments for GM in EV adoption and that GM is "working to finalize agreements with Tesla" to integrate the North American Charging Standard connector design into GM's EVs by next year so that GM owners can have access to the Tesla Supercharger Network's 12,000 fast chargers. Until then, current GM EV owners are to get an adapter to use with the network. Those adapters were supposed to be available for its EV owners this past spring, though Ford told its customers it has been slow to receive the converters it was promised in its agreement with Tesla.

Asked whether GM would move up its plan to add hybrid technology to vehicles in key segments sooner than 2027, Barra said the plan remains in the "2027 time frame."

Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.