Following criticism from President-elect Donald Trump regarding its operations in Mexico, General Motors (GM, Financial) announced Tuesday it plans to invest $1 billion in its U.S. manufacturing operations and add thousands of new jobs.
The automaker said it will create or retain 7,000 jobs over the next few years as part of its increased focus on overall efficiency. The plan also includes new models and plant updates. Company representatives said these plans have existed for years as part of its initiative to streamline and simplify operations while growing the business.
“As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners,” GM Chairman and CEO Mary Barra said.
Since 2009, the company said it has created 25,000 jobs in the U.S. and invested $21 billion. The company also announced an investment of $2.9 billion in 2016. During that same time, GM reduced over 15,000 positions in its foreign operations and brought a majority of those jobs back to the U.S. In addition, it moved 90% of its outsourced IT work to an insourced U.S.-based model.
Of the jobs just announced, around 1,500 will be in factories. Another 5,000 new positions are in key growth areas. GM also announced it will be moving the axle production for its next generation full-size pickup trucks from Mexico to the U.S., creating around 450 jobs.
The Michigan-based company is not the only automobile manufacturer to receive Trump’s criticism. Through Twitter, he has denounced multiple car manufacturers for building cars in Mexico and shipping them to the U.S., threatening to impose a border tax on these auto imports. Ford Motor Co. (F, Financial), Fiat-Chrysler Automobiles (FCAU, Financial) and Hyundai Motor Co. (XKRX:005380, Financial) have also announced large investments in their respective U.S. operations and the creation of new jobs.
General Motors has a market cap of $56.86 billion and an enterprise value of $112.15 billion. Its shares were trading around $37.3 Wednesday with a price-earnings (P/E) ratio of 4.3, a forward P/E ratio of 6.4, a price-book (P/B) ratio of 1.3 and a price-sales (P/S) ratio of 0.4.
Among the gurus invested in the company, Warren Buffett (Trades, Portfolio) holds the largest position with 3.3% of shares outstanding. This represents 1.23% of his total assets managed. In total, 25 gurus hold positions.
Barra indicated the company is dedicated to contributing to the country’s economic prosperity by bringing more of its operations back to the U.S.
“The U.S. is our home market, and we are committed to growth that is good for our employees, dealers and suppliers and supports our continued effort to drive shareholder value,” Barra said.
Disclosure: I do not own any stocks mentioned in the article.
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