General Motors To Retain 4,000 Jobs With $1.5B Investment

General Motors Company (NYSE:GM) recently announced its plans to produce next-gen Chevrolet Colorado and GMC Canyon mid-size pickups, with an investment of $1.5 billion. With this investment, the company looks forward to invest in growth areas and strengthen its U.S. manufacturing base.

The company aims to invest $1 billion for upgrades in its Wentzville, MO-based truck plant, which operates on three round-the-clock shifts. The remaining $500 million will be used to rebuild its suppliers’ factories. Retooling of the plant is expected to start toward the end of this year.

The Wentzville plant’s paint shop, body shop and general assembly areas are anticipated to be upgraded with latest machines, conveyors, controls and tools. The plant, which also manufactures the Chevrolet Express and GMC Savana full-size vans, is likely to retain about 4,000 jobs, including 2,000 for mid-size truck production, with this investment.

This investment is part of General Motors’ pledge to invest $7.7 billion in U.S. manufacturing operations, under a four-year contract approved by UAW members in October 2019.

In the past three months, shares of General Motors have underperformed the industry it belongs to. Its shares have depreciated 5.9% compared with the industry’s rise of 14.1%.

For full-year 2019, General Motors expects capex to come in at $7.5 billion, lower than the prior projection. Amid the UAW strike hassles, the company has revised its full-year view. It now forecasts adjusted EPS between $4.50 and $4.80. The company expects adjusted automotive free cash flow within $1 billion.

Zacks Rank and Stocks to Consider

Currently, General Motors carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector include Weichai Power Co. (OTC:WEICY) , Spartan Motors, Inc. (NASDAQ:SPAR) and SPX Corporation (NYSE:SPXC) . While Weichai Power flaunts a Zacks Rank #1 (Strong Buy), Spartan Motors and SPX carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Weichai Power has a projected earnings growth rate of 6.11% for the current year. Its shares have gained 76.1% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 150.6% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The stock has appreciated 92.3% in the past year.

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