General Motors workers leave the Oshawa General Motors plant in Oshawa, Ontario, on Monday. Photo: Lars Hagberg/AFP/Getty Images
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."