General Motors Company
) announced that it will be shifting the production facility of
Chevrolet Camaro sports car to the Lansing Grand River Assembly
plant, Michigan from the original plant in Oshawa, Ontario in
Canada. The decisions were taken by the company to lower capital
investment and improve production efficiencies.
Camaro is the only rear-wheel drive vehicle assembled at Oshawa
and accounts for about 25% to 30% of the total production. The
Oshawa plant, which employs 2,000 workers, also produces Buick
Regal. It will start manufacturing Cadillac XTS in the near term.
The Lansing plant, which employees 1,600 workers, currently
produces rear-wheel-drive Cadillac. The shift in production
facility will directly affect the workers and production volume
of the plant. Owing to this crisis, the Canadian President called
for replacement of production. General Motors stated that it will
continue with the production commitment with the Canadian
government and provincial Ontario government, agreed in 2009.
General Motors posted a 9.7% decline in earnings (excluding
special items) to 93 cents per share in the third quarter of 2012
from $1.03 in the corresponding quarter a year ago. However,
earnings outpaced the Zacks Consensus Estimate of 61 cents.
Profits ebbed 5.9% to $1.6 billion from $1.7 billion a year ago
due to lower profits from North America and higher losses in
Europe. Revenues grew 2.5% year over year to $37.6 billion,
surpassing the Zacks Consensus Estimate of $36.3 billion. The
improvement was driven by an increase in worldwide sales volume
to 2.3 million units.
Detroit, Michigan-based General Motors is the largest automobile
manufacturer in the world and one of the 'Big Three' U.S.
automakers. The company's significant exposure to troubled Europe
has adversely affected its operations in the continent.
The automaker, which competes with
Ford Motor Co.
), currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. We have a long-term Neutral
recommendation on the stock.
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis
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