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GM, Ford Bump Up Investments in Electric and Autonomous

The Street logo The Street 3/24/2019 Bret Kenwell
a close up of a device: GM, Ford Bump Up Investments in Electric and Autonomous© TheStreet GM, Ford Bump Up Investments in Electric and Autonomous

It's been a very busy week for the automakers and the future of the industry. Specifically, it's been a busy time in Detroit, with both Ford Motor and General Motors making notable investments in electric and autonomous driving.

On Friday, General Motors announced that it would sink a $1.8 billion investment "in its U.S. manufacturing operations across six states, adding a total of 700 new jobs." The move comes following plenty of backlash from various political leaders -- including President Trump -- as well as the UAW after GM announced a large cutback in late 2018.

Of the $1.8 billion, $300 million will be allocated to its assembly plant in Orion Township, Mich., where the company plans to build a new electric vehicle alongside its Bolt EV. The move will result in an addition of 400 jobs.

GM's announcement comes just after Ford announced a $900 million investment in a new factory for autonomous vehicles and technologies, creating 900 jobs through 2023. It also announced an $850 million investment to further its electric vehicle production.

Collectively, we're talking about several billion dollars -- and that's just Ford and General Motors.

For the record, Ford closed down Friday 1.73% to $8.54 and GM down 2.44% to $36.44.

The Direction Is Clear for Automakers

Love Tesla or hate it, the company has been on the right side of technology. While electric vehicles (EVs) were written off only a few years ago, nearly every automaker is now working on ways to electrify its fleet. Whether that means new all-electric models or adding hybrid or fully electric options, it doesn't matter. The direction is very clear at this point and electric vehicles are where automakers are heading.

The other direction? Autonomous driving. However, self-driving cars and EVs are anything but cheap. As a result, it's driving more and more companies to partner together to help limit costs and improve technology.

Just this week, Toyota teamed up with Nvidia for a big autonomous driving partnership, while Volkswagen and Ford recently announced a partnership for some vehicle development and autonomous driving technology. Others, like Honda , have invested in GM's Cruise unit.

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The Bottom Line

It's clear that automotive companies are looking to make the difficult and expensive transition to technology-first mindset. Tech is driving so much of tomorrow's automotive future that these companies have no choice but to get in while they can. Whether that's EV, autonomous, over-the-air updates, or adding A.I. to the vehicle's infotainment system.

At the end of the day, these companies are doing whatever it takes to get it done, too. In the case of Ford this time, it's hiring Tim Stone as its CFO. Stone was previously with Snap and Amazon and will certainly bring a tech-forward mindset to the C-suite.

More commonly, though, it's in the form of massive investments or partnerships with other automakers or tech companies. Expect more of that going forward, throughout 2019 and beyond.

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This article was originally published by TheStreet.

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