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General Motors Company (GM) Stock Shrugs Off Latest Trump Threat

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General Motors Company (NYSE: GM ) is having a fun, if not awkward morning. In the latest of a series of snipes directed at publicly traded companies via Twitter, President-elect Donald Trump fired across the bow of GM stock (whose CEO serves on Trump's strategic and policy forum), sending shares plummeting in pre-market trading. GM stock has since recovered, pushing higher by 0.5%.

General Motors Company (GM) Stock Shrugs Off Latest Trump Threat

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Trump threatened to hit General Motors with a "big border tax" for "sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border."

GM responded to Trump's tweets in a statement, informing the president-elect that it sells very little Mexican-made vehicles in the U.S.:

"General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. All Chevrolet Cruze sedans sold in the U.S. are built in GM's assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S."

And while General Motors did issue more Mexican-made Cruzes to meet demand for its initial rollout of the vehicle, GM has since switched production of its sedans sold in the U.S. to its Ohio plant.

According to GM spokesperson Patrick Morrissey, only about 4,500 of the 190,000 Cruzes sold in the U.S. in 2017 were made in Mexico, amounting to 2.4% of its Cruze sales. That, according to United Auto Workers President Glenn Johnson, is barely a day's worth of production at GM's Lordstown facility.

Bottom Line on GM Stock

GM stock isn't the first to come under fire from Trump - both Lockheed Martin Corporation (NYSE: LMT ) and Boeing Co (NYSE: BA ) were called out for pricey defense contracts, with both stocks taking a short-term hit.

Trump's threats are an extension of his campaign pledge to bring production back to the States, and he has warned before that he would levy a 35% tariff on companies outsourcing production. That threat has shaken some automakers to their core, with Ford Motor Company (NYSE: F ) announcing today that it is cancelling its planned $1.6 billion Mexico factory, instead investing $700 million in a Michigan factory.

But as Johnson put it, Trump's tweets simply make for good news … and great dip-buying opportunities for investors who see through the tweet storms.

As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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