DETROIT -- Bowing to pressures from the Mexican government, General Motors Corp. will move its truck assembly plant out of Mexico City within three to five years because of pollution concerns.
But GM plans to spend $400 million to build a new truck plant in Mexico, a move that has riled members of the United Auto Workers. Caught in a massive reduction of its North American operations, GM so far has spared its facilities in Mexico while cutting 14 assembly and components plants in the United States and Canada.
Mexico, with its $3-an-hour labor rate, appears to be profiting from the cutbacks. Last month, GM announced it would close its engine plant in Moraine, Ohio, and move production to a facility in Toluca, 100 miles west of Mexico City.
"We're very disappointed in General Motors," said Bob Harlow, president of UAW Local 1776 at Willow Run, a Michigan plant set to close next year. "GM is making a big mistake by expanding its presence in Mexico. You get a better product when you build cars and trucks in the United States."
GM said yesterday that it plans to expand its truck production in Mexico by 15 percent over the next three years. A bigger boost may be on the way, if the free trade agreement being negotiated with Mexico turns out to GM's liking.
"You have to take Mexico seriously as a market," said Bill Pochiluk, president of Autofacts, a consulting firm in West Chester, Pa. "It's rapidly growing in size, with GM as the top truck producer."
General Motors de Mexico has yet to determine a site for the new plant, which will build C-20 and C-35 pickup trucks, Suburbans, S-10 Blazers, Maxi-Cabs and P-30 chassis.
The Mexico City plant, which produced nearly 67,000 trucks last year, has come under fire from anti-pollution agencies in the capital.