GM stock rallied on Monday, November 26th as the automaker announced an acceleration to the ongoing transformation of its business that will result in the idling of three assembly plants, two powertrain plants, discontinuing various models, and trimming its workforce by 15 percent.
The Detroit-based automaker’s shares spiked $1.72 or 4.79 percent just before noon on Monday, as investors expressed satisfaction with GM’s decisions. The stock hit a high of $38.64 in intra-day trading and fell $0.40 or 1.06 percent in after-hours trading.
But despite Monday’s rally, GM shares continue to trade only four points higher than the $33 per share level that the “New GM held its Initial Public Offering (IPO) in November 2010. The automaker has been doing a significant amount to increase its share price, exiting unprofitable markets, divesting loss-making divisions, making adjustments to its business model in order to prioritize profit over market share, while investing heavily into new-age mobility ventures such as electric and autonomous vehicle technologies.
Today’s announcements by GM were painted as a way to accelerate the firm’s transformation for the future while building on the comprehensive strategy it laid out in 2015 to strengthen its core business, capitalize on the future of personal mobility and drive significant cost efficiencies. They involve closing three assembly plants and two powertrain facilities to increase capacity utilization, transforming its product development processes to improve quality and speed to market, and a reduction in its salaried workforce.