GM Stock Gains 5 Percent On Job Cuts, Plant Closures4
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.
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Looks like investors dont seem to have a problem with the cut backs!
As one of the biggest supporters of GM, this whole announcement yesterday lost me. Especially when it comes to the CT6 & CT6-V, at least I could say Cadillac was attempting Tier 1 Status with a technologically focused, price competitive full-sizer. Just sad to see Cadillac retreating from that status, except when it comes to Escalade, but I don’t know if I can stick around anymore.
Goes to show that the “market” is destructive to the American way of life and the middle class. ANYTHING that gains value while AMERICANS suffer and lose needs to be removed from the American market. F ALL THOSE LEECHES from EVERYWHERE…
I cannot express the shock I have been feeling since I read about the massive lay-offs and further downsizing.
Everything GM has been doing, has been focused on its stock price: selling Europe, massive share buy-backs worth more than 10 B USD, wanting to position itself as a tech company, now closing more plants… And still after all those billions spent and all the shedding of “unprofitable” business, they are still hoovering around IPO price. Now I ask myself: is this a management team taking good care of the company?
At the time of the IPO, GM was still a world-wide company, nr 3 in the sales race, only marginally behind Toyota and VW, and held big plans for the future.
Today, GM only focuses on China and the US. Europe is gone, even Onstar will stop there end of 2018. GM is now the 5th or 6th manufacturer as far as sales are concerned, and dropping further. US factories are being closed, Korea will likely close, and a number of others too. On the tech front, the most technologically sophisticated car – the CT6 – will be axed. No Super Cruise to be seen in any CT4/CT5 prototype, no news on re-using the its chassis – probably the best in the industry. GM Cruise is “on schedule” to launch a self-driving taxi fleet, but nobody is able to mention a launch milestone. Meanwhile, they scratch everywhere to find more billions to “accelerate” R&D but still have no real prototype running in level 5 mode.
What I see is a company just shrinking and shrinking, telling stories investors want to hear, with another wind-down story every year, telling the world about a vision they have, and not delivering on the promise. So in a few weeks they will be at or below IPO level again. And then they will again announce more downsizing (likely Korea)… And while all of this is unfolding, there’s absolutely zero corporate social responsibility. It’s oh-so-easy to shrink the business and lay off thousands of people; it’s much harder to sustainably grow the business.
Meanwhile, VW is able to grow, electrify, be profitable and strengthen its presence on all continents, despite their exhaust scandals.
It’s more than time that GM engages into a plan to grow the business in all segments and all continents while staying profitable, and that bonuses are paid based on achieving long-term goals and delivering on promises. To me, this management team is not entitled to the bonuses they receive. They just don’t deliver.