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Auto industry analysts weigh in on GM’s future – WFMJ.com News weather sports for Youngstown-Warren Ohio – WFMJ
Posted: Wednesday, June 07, 2017
LORDSTOWN, Ohio -
General Motors investors weighed in on the company’s financial future by widely rejecting a plan to split the company’s stock into two classes.
The decision did not come as a surprise with only nine percent of shareholders voting in favor of the proposal.
Investment experts say General Motors remains a stable stock option.
“GM shares are very inexpensive. They pay a very good dividend, about 4.4 percent,” said David Dastoli, Chief Investment Officer with Farmer’s Trust Company.
Dastoli said that would provide a comfortable stream of income and the stock appears to be pretty safe because of the cash GM has on its balance sheet.
GM Lordstown is still operating with two shifts after eliminating the third shift and the nearly 1,200 jobs that came with it earlier this year.
Local UAW leaders say they’re putting the Valley in the best position possible to be considered for the next wave of GM products.
“The company has been making great decisions. We’re a part of that decision-making process,” said Glenn Johnson, UAW Local 1112 President.
Johnson said the future of the third shift ever coming back is unknown at this time.
UAW Local 1714 President Bob Morales said they’ve been making adjustments and meeting their benchmarks.
The plant recently received an award of honorable mention for quality in its stamping division. All assembly plants compete within the company for recognition in that category.
Industry analysts believe GM is focused on keeping its investors happy with a lean bottom line while it considers what products to develop next.
“In the future, they’re going to have to show how these future mobility systems and autonomous drive vehicles and ride services and electric vehicles, how they’re going to drive the bottom line,” said Phil LeBeau, auto analyst with CNBC.
The strategy on what to build and sell in the years to come is what analysts like CNBC’s Phil LeBeau believe GM is working on now.
GM is trimming back on production at plants including Lordstown amid a slow down and plateau in the U.S. auto market.
Investing in plants could be the next step. General Motors will have to decide where it will build the cars of tomorrow and its path for distribution.
“If you look at their long-term strategy, nothing is for sure forever, but I would say that Lordstown is very likely going to be a core facility for a very long time at General Motors,” said David Cole, founder and CEO of Auto Harvest and former Chairman Emeritus of the Center for Automotive Research.
Cole believes it’s unlikely for a U.S. plant like Lordstown to ever close given the current political climate in Washington. He says there is also tremendous uncertainty in the auto industry on what’s next in the regulatory world under the President Trump administration.