General Motors (GM)
There are two key risks when it comes to the restructuring plans at General Motors (GM). First, will they work? And secondly, will GM be allowed to execute its plan in full? As for the first question, there are reasons for optimism. Cost-cutting should make GM a leaner, more flexible business, as Chris Lau argued.
There’s still concern as to whether GM can compete in self-driving and electric vehicles, admittedly. But GM’s aim of focusing on more profitable, larger vehicles while managing costs seems like the right move for shareholders. But that cost-cutting also has raised the ire of many lawmakers.
President Trump has said publicly that GM had “better” replace plants being closed in Ohio and Michigan. Local representatives on both sides of the aisle are upset.
And with Democrats taking back the House in 2019, there’s the potential for increased fuel-economy standards if a Democrat takes the White House in 2021, before GM’s transformation will be complete. We know where GM wants to go. We don’t know whether it will be able to get there.