General Motors Stock in Trump’s Crosshairs
General Motors Company (NYSE:GM) stock is in the news again after another tweet from President-elect Donald Trump. Trump resorted to his favorite medium—”Twitter” (owned by Twitter Inc (NYSE:TWTR))—to criticize GM.
Trump posted the following tweet on Tuesday, saying that GM is making “Chevy Cruze” models in Mexico and sending them to U.S. dealers tax-free. He warned that there would be a big border tax coming if the company does not produce cars in the U.S.
This is what Trump tweeted:
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!
— Donald J. Trump (@realDonaldTrump) January 3, 2017
GM imports a small number of a certain Chevrolet Cruze model from Mexico that is sold in the U.S. And the company sent a befitting reply through its statement: “All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruz hatchback for global markets in Mexico, with a small number sold in the U.S.” (Source: “Statement on GM Production of the Chevrolet Cruze,” General Motors Company, January 3, 2017.)
GM stock is up more than one percent after losing ground in the pre-market trading.
Donald Trump had earlier started this attack on Ford Motor Company (NYSE:F) for moving jobs to Mexico. But General Motors had been quietly going ahead with plans it had made many years back.
GM advanced on its $800.0-million investment for its global small-car lineup that included a factory retooling in San Luis Potosi state. That plant and another facility in Mexico were to build the all-new “Chevy Equinox” sport-utility vehicle in the year 2017. GM had further said that only the new Equinox will be built in a factory in Canada and two other sites. (Source: “GM invests millions in Mexico as Ford absorbs blows from Trump,” Chicago Tribune, October 14, 2016).
General Motors had already announced its investment in Mexico in the year 2014. The auto giant had planned an investment of $5.0 billion there, and the plan for a factory in San Luis Potosi had been announced in November 2015.
GM stock is riding high on the popularity of its new electric vehicle, the “Chevrolet Bolt,” which is being touted as the mass-market car with the potential to beat Tesla Motors Inc (NASDAQ:TSLA). The news had lifted the sentiment for General Motors stock. If everything goes according to plan, the first Bolts will start coming out of the production facility by the end of 2016. That is what is going to keep GM stock buoyant.