General Motors (GM) to Invest $1 Billion in US Facilities?
General Motors Company GM is planning to invest $1 billion in its U.S. factories, per media reports. The automaker expects this investment to either create or retain 1,000 jobs in the nation.
This investment is part of the company’s long-term scheme of things. The automaker will utilize this investment to upgrade factories for manufacturing newer models.
General Motors revealed its investment plan after President Donald Trump criticized automakers for manufacturing vehicles in Mexico and shipping them to the U.S. The President also said that he will charge a border adjustment tax on General Motors for importing the compact Chevrolet Cruze.
General Motors stated that it is working in line with Trump’s plans to boost production and employment in the U.S. However, the automaker does not have any plans to change the location of production of small vehicles.
General Motors Company Price
General Motors Company Price | General Motors Company Quote
Earlier this month, Toyota Motor Corporation TM announced plans to invest $10 billion in the U.S. over the next five years. The automaker will utilize the funds to meet the rise in demand for fuel efficient vehicles and to upgrade facilities.
Meanwhile, Toyota raised its voice against Trump’s agenda. The company put forward that, though it has extensive manufacturing operations in the U.S., it runs a global business and thus needs to be competitive. A border adjustment tax levied due to production outside the U.S. will unnecessarily raise vehicle prices.
Ford Motor Company F announced that it has called off its $1.6 billion investment in the factory in Mexico. Instead, the company will be investing $700 million in its Michigan facility.
Price Performance
General Motors has outperformed the Zacks categorized Auto Manufacturers-Domestic industry over a year. Share price of the company increased 26.3% over a year, while the industry saw a 25.1% increase. The company benefitted from the strong results last quarter and business initiatives including the expansion of Maven and investment in facilities. Expectations of higher earnings in 2016 and 2017 also buoy optimism.
Zacks Rank & Key Picks
General Motors currently carries a Zacks Rank #3 (Hold).
Factory Holding Corp FOXF is a better-ranked company in the auto space, sporting a Zacks Rank #1 (Strong Buy). The company has an expected earnings growth rate of around 16.6% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Ford Motor Company (F): Free Stock Analysis Report
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