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GM Bets on a Return to Office With New California Campus

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General Motors Co.

GM -0.41%

plans to expand its offices in Southern California with the opening of a new tech campus next year, reinforcing its need for additional physical space as many companies shift more permanently to remote work.

GM said Tuesday the new $71 million campus, which will replace its existing design center in North Hollywood, Calif., will allow it to grow its workforce in the area and help it expand business ventures related to electric and self-driving cars. It will be located on an 8-acre site in Pasadena, Calif., closer to many of the universities and design schools that are prime recruiting grounds for its operations, GM said.

Bryan Nesbitt, executive director of GM’s global advanced design and architecture studios, said working in person is critical to the team’s work, especially because much of what they do is design concept vehicles that are meant to showcase new technologies.

“Today, we still make products that you have to touch, feel and experience,” Mr. Nesbitt said. “Virtual work can only get you so far.”

As the pandemic has made working from home more feasible and even desired, many companies now are weighing whether to continue investing in large office spaces that had long been a cornerstone of corporate culture.

Some businesses are already scaling back with plans to shrink their real estate footprints to generate savings. Others are moving to hybrid-work models, where workers are only in the office a few days a week, or allowing employees to work from home permanently if they want, potentially lessening the need for office space over time.

GM has also said it would offer white-collar employees more flexibility on time spent in the office, as the company shifts from individual desks to more shared workspaces at its Detroit headquarters.

Meanwhile,

Ford Motor Co.

also plans to shift to a new hybrid-work model when it starts bringing back workers in fall. Last year, it asked salaried employees to clear out their desks, aiming to reconfigure the office space for an era where workers will have more options for working remotely.

GM has been stepping up its hiring within the past year as part of an effort to bolster its tech talent and better compete with Silicon Valley firms. Last fall, it revealed plans to hire 3,000 new workers to bolster its engineering and software-development expertise and said it would offer more remote-work opportunities than ever before.

But there are still certain parts of its design operations that can’t be done remotely, such as validating new software-based features and testing a driver’s interaction with the vehicle, Mr. Nesbitt said.

GM’s current location in Southern California employs about 70 workers. The car company has been in that space since 2000, and the work there primarily focuses on developing advanced technologies that have yet to be assigned to production-ready models.

The new California campus, expected to open in the second half of 2022, is part of a broader effort to add onto GM’s corporate facilities. It is constructing a new design center at its global technical center in Warren, Mich., and expanding its advanced-design center in Shanghai.

GM, like other auto makers, has increased its bets in recent years on technologies that were once thought of as moonshots. In June, GM said it would spend $35 billion on electric and autonomous vehicles through 2025—about 30% higher than its target set in November.

It is also moving into new areas, such as developing a lunar rover concept with

Lockheed Martin

and establishing a new electric-truck business called BrightDrop geared toward delivery services.

Despite the tech industry’s broad shift to remote work, Facebook is doubling down on physical office space in New York. It signed a major deal during the pandemic making it one of the city’s largest corporate tenants. WSJ takes an exclusive look inside Facebook’s future NYC offices. Photo Illustration: Adam Falk/The Wall Street Journal

Write to Nora Naughton at Nora.Naughton@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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