Three years ago this month, Mayor Mike Duggan called General Motors Co. CEO Mary Barra in a bid to save the automaker's only assembly plant in the city from closing.
The plant, Duggan felt, had never reached its full potential. But because it sits in the shadow of GM's Renaissance Center headquarters, it made sense for the plant on the border with Hamtramck to be a linchpin of the automaker's transition to an electric future.
"I talked about how much Detroit has historically committed to GM, how much we were committed to their future and I would hope they would think about making the Detroit plant the center of that future strategy and not an afterthought," Duggan said. "They took that very seriously."
Factory Zero Detroit-Hamtramck Assembly Center is an afterthought no longer. It's the first plant building GM's next generation of EVs, starting with the GMC Hummer truck that the Detroit-based automaker will use to position itself as a leader in the emerging EV market, not just a follower of Elon Musk's Tesla Inc.
With a valuation at $91 billion as Tesla's hovers near the trillion-dollar mark, GM still has a way to go to convince Wall Street it should be taken seriously as an EV and tech leader. Experts and executives alike see that changing as the automaker continues to tell its story, reveal its capabilities and unleash more EV product.
"With the Tesla trillion dollar valuation and growing EV appetite among investors for new innovative EV stories, the vertical integration capabilities of GM and conversion of its massive customer base to electric vehicles over the coming years represents a transformational opportunity for Barra & Co. looking ahead," Wedbush analyst Dan Ives wrote in a Sunday note.
"We believe in a bull case scenario GM's stock could hit $100 over the next 12 to 18 months as the EV vision begins to take shape." The automaker's shares closed down 0.66% Monday at $62.97.
Biden in town
GM will showcase Detroit's EV leadership nationally on Wednesday with a grand opening event for the plant featuring President Joe Biden, who is coming to the city fresh off signing a $1 trillion infrastructure bill on Monday that includes funding for EV infrastructure to support automakers in their transition. Biden's Build Back Better Act, which includes more funding for EVs, is still working its way through Congress.
"The Build Back Better plan, which we do support, is a key enabler," said Gerald Johnson, GM executive vice president of manufacturing. "It brings to bear infrastructure and brings to bear the help necessary to accelerate the technology. So industry in General Motors working with the administration, I think is the way that we can see how we change mobility here in the United States and even ultimately, globally."
The Build Back Better bill would give customers of GM and its crosstown rivals Ford Motor Co. and Stellantis NV $12,500 consumer rebates for electric vehicles, which include $4,500 for cars built by union labor, providing them an advantage over Tesla, the EV market leader.
Battery electric vehicle sales have continued to grow since 2016, according to Edmunds.com Inc. data, but in 2020 they accounted for less than 2% of the U.S. market, and most of the EVs sold today are Teslas.
GM is looking to change that with a goal of selling 1 million EVs globally by 2025 and offering 30 electric nameplates also by mid-decade. More than two-thirds of those will be available in North America. The automaker has created its own Ultium batteries and a flexible third-generation global EV platform. GM claims Ultium batteries are unique because "the large-format, pouch-style cells can be stacked vertically or horizontally inside the battery pack," which optimizes battery energy storage.
The automaker is making sure on its own it has the supplies needed to power this transition by building four battery cell manufacturing plants in the U.S. with partner LG Energy Solution in a joint venture called Ultium Cells LLC.
There's been debate over whether the battery plants GM is building will be unionized because of the joint venture, but United Auto Workers Vice President Terry Dittes said: "We do not anticipate pushback from Ultium ... and there's no doubt in our mind that we are going to represent those workers."
Executives continually say GM's UAW-represented workers will be "invited along" for this electric transition. But with fewer parts on EVs and diminishing need for engine plants, there is concern among union officials and members about what this transformation could mean for jobs.
"We have thousands of members that make transmissions, that make engines and now we're going to have fuel cells, we're gonna have batteries, it's going to be a whole new challenge for us in the union to retain that membership, continue to provide the jobs that we have in the past," Dittes said. "The whole thing is a challenge. It's a challenge for the UAW. Quite frankly, I think it's (a) challenge for all of the automakers because of the lack of infrastructure in the EV market."
Still, the significance of Factory Zero's return from the dead is not lost on Dittes, director of the union's GM Department who led negotiations with the automaker in 2019 that included a 40-day strike. In a cost-cutting effort announced the Monday after Thanksgiving weekend in November 2018, GM said it would idle five plants — four of them in the U.S., including what was then called the Detroit-Hamtramck Assembly plant, or D-Ham.
Instead, GM invested $2.2 billion into Factory Zero to build the Hummer EV truck and SUV, Cruise Origin electric autonomous shuttle and the coming electric Chevrolet Silverado.
"There's no way it would've came back without the union intervention," Dittes said.
'No place like home'
Back in 2018, Meme Edwards of Harper Woods "hoped and prayed" the plant she had worked at since 1997 would stay open. Worried about her future, she thought of jumping ship and securing a position at another GM plant.
"My husband was like, 'just wait because there's no way they're gonna shut this plant down,'" she said. "He was like, 'that plant is in Detroit; it's in the heart of Detroit ... they're going to do something with it.'"
Edwards is now working on the Hummer launch team, making sure the jobs are "doable" for members of the plant's UAW Local 22.
"There honestly is no place like home," she said. "When the plant was closing ... it was really dark and gloomy, but now I see people are happy to be back."
When fully operational, Factory Zero is expected to employ 2,200 people. GM is still in the pre-production phase for the Hummer EV truck and expects to have models in customer hands by year's end.
Factory Zero is one of five North American plants GM has slated to build EVs. It's the second one in Michigan, which is also home to Orion Assembly in Lake Orion, where the Chevrolet Bolt EVs and EUVs are built. The Bolts, which are not based on the Ultium battery technology, are under recall for battery fire risk.
"We call it Factory Zero because it kind of begins here," said GM's Johnson. "Certainly, we've been building Bolts at our Orion facility for some time, but this is a complete redo of the factory to enable what's really going to be the foundation of our EV future with the Ultium platform being the technology that provides the propulsion and the infrastructure for the vehicle ... this is really where it begins. Our EV future starts at Factory Zero with the EV Hummer."
Biden's Wednesday visit is not the first presidential tour for the Detroit and Hamtramck plant. In 2010, then-President Barack Obama hopped in a Chevrolet Volt hybrid sedan and drove 40 feet off the assembly line. He called the ride "pretty smooth."
Biden came to Metro Detroit six months ago and surprised everyone with his drive of a Ford F-150 Lightning truck. It's unclear if GM will give Biden the chance to ride in the new Hummer, which it's reviving after shuttering the brand more than a decade ago amid the automaker's bankruptcy.
The Hummer, once known as a gas-guzzler, is returning as an EV that offers 350 miles of range on a single charge. GM touts unique features to differentiate it from the crowd, including a crab mode for diagonal driving, an open-air roof and a 3-second 0-60 sprint when equipped with three electric motors.
GM is "not just this dinosaur that wants to produce ICE cars," said Jessica Caldwell, executive director of insights at Edmunds. "They're showing that they're not that company. That is positive because that was really the criticism that they faced when they filed for bankruptcy was that 'you're not changing with the times' ... it really shows how far they've come in really just over a decade."