What they're saying: Analysts react to GM job cuts
Wall Street analysts are responding to General Motors' plans to lay off nearly 15,000 salaried workers in 2019 and idle five North American manufacturing plants.
The big picture: Analysts were largely surprised by the scale of the restructuring, GM's largest since emerging from bankruptcy, but welcomed the cost cuts.
What analysts are saying:
- Philippe Houchois, Jefferies automotive analyst, wrote in a note to clients that it was a "bigger restructuring than expected" and is "certainly piling pressure on Ford to announce plans."
- Rebecca Lindland, Kelley Blue Book executive analyst, in an email to Axios: "Mary Barra is pushing GM into the 21st century by proactively up-ending nearly every part of the U.S. business and its global operations, positioning the company to be more flexible, agile, and streamlined. But it comes at a tremendous cost to people and the communities which depend upon GM plants for economic sustainability."
- Michelle Krebs, Autotrader analyst, in an email to Axios: "A confluence of factors has triggered GM’s actions: a downturn in the important China market as well as a potential downturn in the North American market — the two are GM’s biggest markets; the dramatic shift by consumers from traditional cars to utility vehicles; and the impact of tariffs and trade issues."
- Colin Langan, UBS analyst: "GM's cost reduction efforts have been a key driver of its operating performance and have helped offset recent commodity & [currency] headwinds. We are impressed by GM's proactive cost actions, and remain bullish on the stock."