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General Motors (GM) Infuses C$280M for Oshawa's Truck Evolution

General Motors GM has announced a significant investment of C$280 million in its Oshawa Assembly plant to propel the production of next-generation internal combustion engine (ICE) full-size trucks. This move underscores GM's sustained commitment to Canadian manufacturing, following a hefty $1.2 billion investment in the Oshawa plant in 2020.

In a proud showcase of agility, the Oshawa Assembly executed one of the swiftest plant launches in GM's history two years ago. The revival sparked the creation of 2,600 new manufacturing jobs, with a noteworthy 50% of new production hires being women. A ripple effect ensued, culminating in thousands of indirect jobs within Canadian suppliers and the ramping up of production to three shifts.

Marissa West, president and managing director of GM Canada, expressed her enthusiasm for the continued investment, underscoring Oshawa's vital role in satiating the demand for GM's pickup trucks. GM led the Canadian industry in heavy-duty truck sales in 2022, and this renewed commitment suggests a robust future for its truck production.

Unifor National President, Lana Payne, echoed these sentiments, emphasizing the significant implications of this investment for the Oshawa and Durham region. The promise of continued truck production at the Oshawa plant not only secures thousands of jobs but also stabilizes the plant's footprint for years to come.

A Look at GM's Canadian Investment Journey

General Motors has made notable strides in its Canadian operations since 2020, fueling the country's manufacturing, research and development, and electric vehicle (EV) supply chain sectors. These initiatives have seen multiple investments in its existing facilities and new ventures alike, symbolizing GM's commitment to advancing the Canadian automotive industry.

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One of the major investments was the opening of Canada's first renewable landfill gas cogeneration plant in St. Catharines Propulsion Plant in August 2020. This innovative project reduced the facility's greenhouse gas emissions by a significant 70%. In November 2020, GM committed to investing in several of its Canadian operations — the Oshawa Assembly for full-size truck production, the St. Catharines Propulsion Plant for Corvette transmissions, and the Woodstock Parts Distribution Centre for Customer Care and Aftersales.

In January 2021, GM unveiled plans to invest in CAMI for BrightDrop production. This was quickly followed in February 2021 by the establishment of the Canadian Technical Centre McLaughlin Advanced Technology Track (CTC MATT) in Oshawa. The CTC now employs more than 1,300 engineers and software developers, making it a major player in Ontario's tech industry.

In March 2022, GM and POSCO Chemical announced a C$500 million facility to produce cathode active material for GM's Ultium batteries in Bécancour, Québec. In April of the same year, 2,600 new jobs were created with the restart of Oshawa operations.

The end of 2022 brought another announcement from GM, a long-term supply agreement with Vale Canada for battery-grade nickel sulfate. This would enable the production of approximately 350,000 EVs annually. The company also began BrightDrop Zevo production at CAMI Assembly by 2022-end.

Finally, in February 2023, GM unveiled plans to invest in St. Catharines Propulsion Plant to manufacture new Ultium electric drive units. This investment is likely to support around 500 jobs and enable the production of more than 400,000 EV drive units per year.

Conclusion

With the latest strategic investment, GM continues to reinforce its commitment to Canadian manufacturing and next-generation technology. This investment, while securing jobs and boosting the local economy, promises to fuel the production of world-class vehicles that cater to an ever-evolving consumer base.

Zacks Rank & Other Key Picks

General Motors currently sports a Zacks Rank #1 (Strong Buy). A few other top-ranked players in the auto space include Ford F, Stellantis STLA and BMW AG BAMXF.

Ford, General Motors’ crosstown rival, is one of the leading automakers in the world. Ford's robust BEV lineup — with Mustang Mach-E, E-Transit and F-150 Lightning — is set to drive top-line growth. The company currently sports a Zacks Rank #1 and has a Value Score of A.

The Zacks Consensus Estimate for F’s 2023 sales implies year-over-year growth of 7.5%. The consensus mark for 2023 and 2024 EPS has moved north by 12 cents and 7 cents, respectively, over the past seven days.

Stellantis, an Italian-American carmaker, is one of the notable names in the auto space. Stellantis’ Dare Forward 2030 strategy bodes well. The core objective of Dare Forward 2030 is to achieve 100% of total passenger car sales in Europe and 50% of light-duty truck and passenger car sales in the United States as battery electric vehicles by the end of the decade.

The Zacks Consensus Estimate for STLA’s 2023 sales implies year-over-year growth of 13.4%. The consensus mark for 2023 and 2024 EPS has moved north by 27 cents and 49 cents, respectively, over the past 60 days. The stock sports a Zacks Rank #1 and has a Value Score of A.

BMW is a Germany-based auto titan that designs, manufactures, and distributes luxury vehicles and motorcycles. BMW AG is taking great strides in electrification and expects EVs to account for 50% of its global sales by 2030. For 2023, the company plans to increase BEV share to 15%.

The Zacks Consensus Estimate for BAMXF’s 2023 sales implies year-over-year growth of 9%. The consensus mark for 2023 EPS has moved north by 6 cents and 81 cents, respectively, over the past 30 days. The stock sports a Zacks Rank #1 and a Value Score of A.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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Ford Motor Company (F) : Free Stock Analysis Report

General Motors Company (GM) : Free Stock Analysis Report

Bayerische Motoren Werke AG (BAMXF) : Free Stock Analysis Report

Stellantis N.V. (STLA) : Free Stock Analysis Report

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