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General Motors (NYSE: ) faces challenges as it navigates the evolving automotive landscape, with recent , a credit rating downgrade, and fluctuating stock performance. The automaker is implementing significant changes at its Kansas plant while simultaneously grappling with about its future earnings potential.
GM Layoffs and Plant Restructuring
GM has announced plans to lay off 1,695 workers at its Fairfax Assembly plant in Kansas, a move that will unfold in two phases. The first round, set to begin on November 18, 2024, will temporarily lay off 686 full-time workers and terminate 250 temporary employees. The second round, scheduled for January 12, 2025, will see an additional 759 full-time workers temporarily laid off.
These layoffs are part of a broader restructuring effort that includes a in the Fairfax plant to accommodate production of the new Chevrolet Bolt EV.The restructuring plan, initially announced in May 2024, will pause production of the Cadillac XT4 after January 2025 to facilitate the installation of new tooling. GM expects production to resume in mid-2025, with both the Bolt EV and XT4 being manufactured on the same assembly line. This move follows a previous round of layoffs in August 2024, when GM cut more than 1,000 salaried positions worldwide in its software and service units.
GM Stock Hit By Recent News
On September 23, 2024, Bernstein downgraded GM’s rating from Outperform to Market-Perform, citing rising earnings headwinds and potential capital requirements.
The firm lowered its target price for GM from $54.50 to $53, despite the stock’s 85% surge since November 2023. Bernstein reduced its 2025 forecast for GM by 8% to $8.23 and lowered its projection for shareholder distributions between 2025 and 2027 by 17% to approximately $10 billion.Analysts at Bernstein expressed concerns about several factors affecting GM’s outlook, including U.S. inventory buildup creating pricing pressures, delays in ramping up electric vehicle production, continued losses from GM’s autonomous vehicle division Cruise, and international business challenges. The firm also voiced apprehension about GM’s upcoming October Capital Markets Day and the potential for announcements of additional capital requirements.As of 11:12 AM EDT on the day of reporting, GM’s stock price stood at $47.26, down $1.62 (3.30%) for the day. Despite the recent downturn, GM’s year-to-date return of 32.55% and one-year return of 46.56% have outperformed the S&P 500.
However, the company’s three-year and five-year returns have lagged behind the broader market index. GM’s market capitalization was reported at $53.083 billion, with a trailing of 5.49 and earnings per share of $8.90. The current stock price remains below the average analyst price target of $56.21, suggesting potential upside according to some market observers.More By This Author:Is MSTR Stock Still A Buy As It Builds A Massive Bitcoin Pile? Constellation Energy Inks Nuclear Power Deal With Microsoft, Stock Gains Nike Announces CEO Change Amid Restructuring; Stock Surges in Pre-Market
