10May
Industry watchers have become accustomed to reading between Mary Barra's signature coded remarks. A prominent voice on policy and corporate responsibility, Barra has been well known for her strategic, measured communication style, even before assuming the roles of chair and CEO of General Motors (GM) in 2014 and 2016, respectively. Being the world's first female chief executive of a major global auto manufacturer, Barra oversees GM’s global operations.
While highlighting financial strategy during the company’s Q1 2025 earnings call in May, she mentioned “prudent capital allocation aligned with regulatory realities.” For industry watchers familiar with the CEO’s penchant for corporate doublespeak, this remark hints at an impending obituary for GM’s internal combustion engine (ICE) business.
"Capital allocation” and “regulatory realities” in one sentence might just be a muted announcement of one of the most significant pivot points in GM's 115-year history.
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The Q1 earnings conference call remark is just one of several signposts from the company's recent body language. The most glaring of these signposts is notably GM’s sudden silence on previously confirmed ICE development programs, not least its next-gen small-block V8 destined for future Corvettes. GM has also become tight-lipped about its highly anticipated, updated 6.6-liter engine meant for its HD truck models.
Contrasting this silence with the company’s enthusiastic detailing of every minor update to its Ultium battery program, the chairwoman’s recent emphasis on the “prudent capital allocation aligned with regulatory realities” can be interpreted as the death knell of GM’s ICE future. Similar signposts emerge from a careful examination of GM's manufacturing footprint regarding the company's ICE manufacturing operations.
The iconic Spring Hill Assembly plant, where combustion engines for the Cadillac nameplate are built, barely merited attention during recent capital investment discussions. It’s a similar story with the Flint Engine operations.
2021 Chevy Tahoe diesel engine.
Long a cornerstone of GM’s small four-cylinder SGE and Duramax I6 engines, it now appears only worthy of conspicuously little attention in the marque’s corporate priorities. This is despite Flint’s historic importance as the original home (Flint North) of the legendary Vortec V8.
If GM's shot callers concluded ICE has little to no role in its future, the transition is particularly interesting due to how the company has chosen to achieve this goal. Shunning dramatic plant closures and sweeping discontinuations, it has instead chosen to cloak the transition away from ICE in what the industry calls “flexible propulsion manufacturing.”
FPM can apply to multi-fuel propulsion systems. Or a model of producing both ICE and electric cars on the same lines. It offers the perfect disguise, as it allows GM to keep its existing facilities operational while gradually cutting back its ICE output quietly.
GM’s Arlington, Texas, plant is a textbook example of this strategy. Operational since 1954, it remains the birthplace of full-size SUVs, including the Chevrolet Tahoe, Suburban, GMC Yukon, and Cadillac Escalade, as GM quietly reconfigures the plant to accommodate battery module installation.
While it is true that GM has been expanding its North American EV plants to include battery module assembly, the reconfigurations can be interpreted as more of a calculated retreat from combustion technology than pure manufacturing flexibility. Indeed, Fort Wayne's truck plant is subject to similar reconfigurations, where "propulsion agnostic" body shops will soon allow the same assembly line to seamlessly transition between ICE and electric Chevy Silverados.
2022 Chevy Silverado 1500 / Photo Credit: LukaCali via Wikimedia.
Pivoting from ICE to alternative fuel also makes financial sense for GM. Massive operational shifts such as assembly plant reconfigurations come with cold financial calculus. The company can hardly be blamed for its decision, not in the face of precedents like California’s looming ICE ban by 2035 and tighter EPA emissions standards set to take effect in 2027.
Industry watchers already estimate that automakers complying with the upcoming NOx regulations could see as much as $4,500 added to the production cost of each gas-powered vehicle. This figure hardly inspires confidence, especially considering the market’s already shrinking margins. GM's approach to labor and staffing further signals its long-term intentions.
Extending its job guarantees through 2028 just happens to match up with the next major UAW (United Auto Workers) union contract negotiation period, providing a convenient cover for an attrition strategy.
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In other words, instead of firing people and risking the publicity of layoffs and negative press about job cuts, the company will simply not refill the positions of retiring ICE-focused workers. This natural attrition strategy allows GM to shrink its combustion workforce over time, while making room for more EV production.
Another telltale of what Barra isn’t saying about GM’s true intentions might just be the company’s recent intellectual property strategy. While it has invested nearly $1 billion in its 6th-gen small-block V8, credible sources reported GM’s plans to phase out gas cars by 2035. This can be interpreted as selling your winter coat in April, knowing you won't need it next year.
Dealerships and even independent repair shops will be among the first to catch where the wind is blowing. They will notice changes in the availability of parts and continued or withdrawn technical support for older combustion models. GM is investing heavily in EV production while assuring continuity of its 6.2-liter LT and 5.3-liter EcoTec3 V8 engines, albeit exclusive to its trucks and performance models.
These corporate strategies allow GM to, between now and 2027, keep dealers happy with final updates to existing ICE models like the Silverado and Tahoe. But between then and 2030, those purported “flexible” manufacturing plants will have fully transitioned to primarily EV production.
From then onwards, whatever combustion vehicles that remain in GM’s portfolio will likely be built outside the US and aimed at overseas markets. The company's Mexican engine operations will probably be the last man standing.
Ultimately, it’s a long road from here to GM’s full transition, during which time the company must carefully navigate union relationships and dodge public relations disasters, all while staying at the forefront of ICE technology in order to keep existing customers happy as it races toward an electric future.
The ultimate irony is that GM might be moving away from its combustion engines to survive the regulatory environment, and not because it has inferior technology and can’t compete with rivals. That would mean surrendering to compliance costs, which is sadder than losing to better technology.
It might also explain why the company would choose to surrender quietly via a hundred quiet cuts rather than one dramatic swing. Those “hundred quiet cuts” are a high-wire act requiring precise timing, careful executions, and measured messaging - hence Barra's emphasis on "prudence" and "alignment."
In the meantime, GM continues its balancing act of masking its True North without turning off the lights, shuttering manufacturing plants, or ejecting “older” staff. As its waning ICE business disappears in the shadows of a looming electric future, what’s left unsaid in those earnings calls is that GM’s internal combustion engine's days are numbered.
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