General Motors (GM - Free Report) recently completed the sale of its shuttered Ohio factory to electric truck start-up Lordstown Motors Corp. The sale of the complex, which was opened in 1966, was carried out for an undisclosed amount.
The factory’s fate was decided when the United Auto Workers ("UAW") union failed to convince General Motors to retain it under the latest labor contract, which was approved in October 2019.
The Ohio factory sale is expected to turn the Lordstown area into a centre for electric-vehicle manufacturing. Meanwhile, General Motors will invest in a nearby factory that will make battery cells for electric vehicles. This is likely to create about 1,000 UAW-represented jobs in Lordstown.
Meanwhile, Lordstown Motors is expected to initiate the production of Endurance, its first electric pickup, in 2020. Endurance will deliver four in-wheel drive, with one motor for each wheel and is likely to hire 400 UAW workers with wage of roughly $31 an hour. It is anticipated to lower repair costs for fleet operators by possessing fewer moving parts than existing pickups. It also will have outlets that will enable users to run power tools off the battery.
Owing to the General Motors-UAW strike, the auto giant revised its 2019 earnings view. It now forecasts adjusted earnings per share between $4.50 and $4.80 per share. The company expects adjusted automotive free cash flow within $1 billion.
Zacks Rank & Stocks to Consider
General Motors currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. (SPAR - Free Report) , SPX Corporation (SPXC - Free Report) and BRP Inc. (DOOO - Free Report) , each carrying a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have rallied 110.7% in a year’s time.
SPX has an expected earnings growth rate of 23.18% for 2019. The company’s shares have surged 57.6% in the past year.
BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 18.9% over the past year.
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