GM’s 2024 surge stalls following Trump’s tariff threat
Over the last 12 months the stock has nearly doubled.
Automakers Ford and General Motors are getting buffeted Monday by President-elect Donald Trump’s tweeted tariff threats Tuesday against Mexico, Canada, and China.
It makes sense, seeing as the companies’ vehicles are cobbled together over an elaborate production system that involves both US factories as well as those located in America’s neighbors to the north and south.
But as far as General Motors is concerned, the tumble only underscores what a remarkable run the stock has had recently.
Just a year ago, the stock was getting battered as the company faced challenges galore. First, GM was — along with competitors Ford and Stellantis — enmeshed in contract negotiations with the UAW. Meanwhile, its troubled Cruise self-driving vehicle unit paused operations after losing some licenses to operate in California when one of its robotaxis severely injured a woman. And sales of EVs — an area where Ford and GM had spent billions to retool factories and produce batteries and other components — were slowing.
But since then, GM shares have surged, outpacing not only age-old rival Ford, but also Tesla.
The reason? Profits. The company is within spitting distance of record operating profits, thanks to solid sales of its traditional bread-and-butter offerings of gasoline powered SUVs and pick-up trucks.
But on top of that, it seems that CEO Mary Barra’s strategy of slowly entering the electric car market is bearing fruit, as the New York Times Neil Boudette reported in October:
Sales of G.M.’s battery-powered models are starting to surge as the company begins to reap its big investments in standardized batteries and new factories. Ford's three electric models, including the F-150 Lightning pickup truck and a Transit van, are still selling well but are racking up billions of dollars of losses.
