GM’s restructuring plan is a positive move

Morningstar analysts raise fair value estimates of the no-moat, four-star auto manufacturer.

Morningstar.com 27 November, 2018 | 6:00PM

 General Motors (GM) announced yesterday that it will cut 15% of its salaried staff and factory workers, 25% of its executives, and stop allocation to five factories – four in the US and one in Oshawa, Ontario. Additionally, the company announced it would cease operations of two additional plants outside of North America by the end of 2019.

“With changing customer preferences in the US and in response to market-related volume declines in cars, future products will be allocated to fewer plants next year. Assembly plants that will be unallocated in 2019 include Oshawa Assembly in Oshawa, Ontario, Canada, Detroit-Hamtramck Assembly in Detroit and Lordstown Assembly in Warren, Ohio”, the company said in a press release.

The move lead to the stock closing the day higher, up over 4.7%.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
General Motors Co21.30 USD8.95

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