(CNN Money) — General Motors’ hot new SUV will be made in Mexico.
The rebooted Chevrolet Blazer is part of GM’s attempt to make SUVs in all shapes and sizes to quench Americans’ insatiable thirst for big cars. The Blazer is bigger than an Equinox but smaller than a Traverse.
GM hasn’t made a Blazer since 2005. The new Blazer doesn’t look like the old one, but like the original Blazer, it’s aimed at a younger audience.
Why is GM building such a high-profile SUV aimed at an American audience in its Ramos, Mexico, plant?
Mexican plants have cheaper labor costs than in the United States, and GM’s Ramos plant is already set up to manufacture bigger cars, including the Equinox SUV. (It also makes the smaller hatchback Cruze there.)
GM operates three assembly plants in Mexico. The Silao and San Luis Potosi locations are the two others. The company employs about 15,000 there.
But the decision to build autos in Mexico is fraught with controversy.
The Trump administration has threatened to penalize automakers that import cars and trucks to the United States. The White House is also seeking changes to NAFTA, which currently allows free movement of vehicles and parts across the US borders with Mexico and Canada. Vehicles built in Mexico and Canada and sold in the US market use many parts built in US factories.
GM is not alone in building vehicles in Mexico for the US market. All of the major automakers have plants in Mexico building cars and trucks for the US market.
But the industry has gradually returned to the United States over the past decade. American auto sales have climbed since the Great Recession, and automakers have brought back many of the jobs at US plants — GM employs 103,000 in the United States, 33% more people at US auto plants than it did in 2009