25.72 -0.01 (-0.04%)
After hours: 5:44PM EDT
|Bid||25.63 x 3200|
|Ask||25.75 x 2200|
|Day's range||25.43 - 26.04|
|52-week range||14.33 - 41.90|
|Beta (5Y monthly)||1.42|
|PE ratio (TTM)||7.89|
|Earnings date||29 Jul 2020|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||05 Mar 2020|
|1y target est||36.94|
While General Motors' (GM) defense arm secures contracts worth $223 million to manufacture infantry squad vehicle, Ford (F) ties up with Disney for the launch of its Bronco SUV.
Kyle Dennis took a leap of faith and decided to invest his savings of $15K in the stock market — $2.8M later, he owes his success to these strategies
U.S. automakers have been squeezed this year by a combination of falling demand because of the weak economy and supply constraints because of coronavirus-related plant shutdowns. GM and its dealers delivered 492,489 vehicles in the U.S. during the second quarter: down 34% year over year. All four of its brands posted sales declines in excess of 30%, including a 41.4% drop at Cadillac, which was hurt by a soft luxury vehicle market.
Tesla shares have soared to new record highs this week, with the company now more valuable than ExxonMobil – one of the largest oil companies on earth
(Bloomberg Opinion) -- Back when Tesla Inc. delivered 95,000 cars to customers during the spring quarter of 2019, the stock price was languishing at about $235 and Elon Musk’s electric car company was valued at “only” $40 billion. Fast forward a year and the shares are now priced at more than $1,200. With a market capitalization of $224 billion, Tesla has surpassed Toyota Motor Corp. as the world’s most valuable automaker.Yet in the second quarter of 2020, Tesla delivered 91,000 vehicles — about 5% fewer than the same period last year. That’s pretty underwhelming for a company whose fans view it as a fast-growing technology company in the mold of Amazon.com Inc., rather than a sluggish metal-bashing carmaker. So how is the massive recent jump in its market value justified?In fairness, it shows resilience to sell this many cars when the company’s main California plant was shut by the pandemic for much of the spring period. Doubtless, Tesla’s new Shanghai plant picked up the production slack, which suggests the expense and effort of getting that China factory up and running was worth it. The launch of Tesla’s new Model Y crossover vehicle will have helped. Ford Motor Co. and General Motors Co. both saw their U.S. deliveries decline by a third in the same quarter. Nevertheless, Tesla’s stock market acolytes pushed the shares up another 8% on Thursday, adding $16.5 billion to the market value. Such exuberance is hard to understand. Musk’s company sold 7,650 more vehicles than analysts expected during the second quarter, and the stock price jump equates to about $2 million of added shareholder value for each of those additional sales. This seems a little excessive given that a Tesla Model 3 sells for less than $40,000, and the profit margin on those cars is pretty slim. The shareholder reaction makes even less sense when you consider that Tesla investors aren’t really meant to buying the stock because of the company’s current sales, which are less than 4% of Volkswagen AG’s. Rather, the investment case is a long-term one: that it will come to occupy a dominant position in clean transport and energy in the years ahead. That explains why the shares trade at 320 times its analyst-estimated earnings this year. Viewed through this lens, Tesla’s ability to shift a few thousand extra cars in recent weeks shouldn’t matter so much for the valuation. Investors’ tendency to overreact to Tesla news made more sense when its survival was open to doubt. A year ago it was laying off workers, U.S. sales were slowing and its retail strategy was confused. Senior staff kept heading for the exit. The company was burning through cash and ran pretty low on financial fuel. It had just $2.2 billion of cash in March 2019, compared with more than $8 billion now.But subsequent evidence that Tesla can sell cars for more than it costs to produce them has transformed the mood — and with it Tesla’s stock price.Instead of “killing” off Tesla, the tepid electric offerings of established carmakers such as Audi and Mercedes have only underscored the quality of their rival’s battery and powertrain technology (the same can’t be said of Tesla’s build quality). Volkswagen’s software problems with its forthcoming ID.3 electric vehicle suggest catching Tesla won’t be straightforward, even with the Germans’ vast resources.Tesla’s stratospheric valuation appears to have become self-reinforcing. Should it require more money to fund its roughly $9 billion of capital expenditure over the next three years, it can raise it from shareholders without worrying about diluting them too much.Similarly, holders of more than $4 billion of convertible bonds that Tesla issued to fund its expansion should be happy to convert them into stock, rather than demand cash repayment, taking some of the pressure off the company and its balance sheet. Still, Tesla’s valuation remains impossible to justify by any standard metrics. Analysts’ average price target is more than 40% below the current level. Even Musk has suggested that the share price, which has almost trebled since the start of 2020, is too high — although, as with his taunting of the U.S. Securities and Exchange Commission and his comments about “fascist” lockdowns, it’s usually better to tune out what Musk says and focus on his actions instead. The skeptics might have more faith in Tesla’s new position as the leader of the automaker pack when Musk stops his provocations and his shareholders stop getting giddy over modest good news.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
General Motors Co's <GM.N> vehicle sales in China dropped 5.3% between April and June from the corresponding period last year, underperforming the industry average amid a recovery from the coronavirus fallout on the world's biggest auto market. China's overall figure, which includes passenger and commercial vehicles, rose 4.4% in April and 14.5% in May, said the China Association of Automobile Manufacturers (CAAM), adding that it expected auto sales to grow 11% in June. GM, China's second-biggest foreign automaker after Volkswagen AG <VOWG_p.DE>, delivered 713,600 vehicles in the country in the second quarter, the company said in a statement, after reporting a drop of 43% in sales in the first quarter, due to the pandemic.
Here's why Tesla's stock continues to be on fire.
Moody's forecasts global auto sales decline of at least 20% year over year in 2020, with major impacts to be felt in North America and EMEA.
General Motors' (GM) latest contract is for the first batch of 649 such vehicles, while the overall approved requisition objective is for 2,065 vehicles over the next decade.
(Bloomberg) -- General Motors Co. and Fiat Chrysler Automobiles NV heaped praise on U.S. consumers after their quarterly sales held up better than analysts expected and left dealerships with lean vehicle inventory.Deliveries dropped 34% for GM and 39% for Fiat Chrysler, both better than projected. Although Toyota Motor Corp. narrowly missed estimates, its decline tempered toward the end of the quarter, with June sales falling 27%.“This quarter demonstrated the resilience of the U.S. consumer,” Jeff Kommor, head of U.S. sales for Fiat Chrysler, said in a statement. “Retail sales have been rebounding since April as the reopening of the economy, steady gas prices and access to low interest loans spur people to buy.”Automakers are overcoming a decimation of demand from rental-car companies that have sworn off purchases in the wake of the coronavirus outbreak that has hammered the travel industry. Retail sales actually jumped the last two months for Hyundai Motor Co. in an extreme example of how quickly consumers are returning to showrooms.“We’ve learned a great deal in the past 90 days,” said Randy Parker, U.S. sales chief for Hyundai, which in March reinstated a job-loss assurance incentive program. “It has given us the confidence to fight our way through the pandemic.”Hyundai is making as much as six months of payments for customers who buy or lease through its finance unit and lose their job. Ford Motor Co. has started a similar program, covering up to $15,000 of vehicle owners’ remaining balance if they need to return their car or truck.Uncertain OutlookGM is beginning the second half of the year with tight inventory of pickups. Supplies were depleted by a 40-day labor strike in the second half of last year, and the automaker has run low again the last few months due to factory shutdowns related to Covid-19 containment measures.The largest automaker by U.S. sales has raced to get production lines back to pre-virus levels even as it cautions there could be fresh setbacks ahead.“We expect continued sales recovery as businesses ramp back up, but recognize that the path forward may not be linear,” Elaine Buckberg, GM’s chief economist, said in a statement. “Rising infections in many states may lead to steps backward in the reopening process.”GM shares dipped 1% as of 2 p.m. Wednesday in New York trading, while Fiat Chrysler was down 3.8%. Ford will publicly release sales results on Thursday.(Updates with Hyundai executive’s comment in the fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Ohio Attorney General Dave Yost said Tuesday that General Motors Co should repay $60 million in state tax credits after it closed its Lordstown Assembly plant in March 2019. In a brief to the Ohio Tax Credit Authority, Yost said GM in 2009 agreed to maintain operations at its northeast Ohio plant through 2028 and retain 3,700 jobs through 2040 in exchange for the credits. "We demand the money that is rightfully owed to Ohio – no more, no less," Yost said in a statement.
(Bloomberg) -- The United Auto Workers union local in Arlington, Texas, has asked General Motors Co. to temporarily close its large-SUV plant in the city for the safety of its workers as cases of Covid-19 rise rapidly in the state.“Due to the most recent data on the Covid-19 outbreak, the Bargaining Committee has asked General Motors to shut down Arlington Assembly until the curve is flattened for the benefit and well-being of our members,” UAW Local 276 said on its website. “Every day we are setting new records in the number of people who are testing positive in the Dallas-Fort Worth area.”Confirmed Covid-19 cases in Texas have been rising by more than 5,000 a day in recent weeks, and the Lone Star State reported 4,288 new cases yesterday, according to the Texas Department of State Health Services. Cases in Tarrant County, where the plant is located, increased by 393.Read more: Texas’s Positive-Test Rate Soars to Record 14.31%: State DataThere could be a standoff over closing the GM plant. The union is worried about worker safety, but shutting down Arlington would be a hit for GM. The plant is running on three shifts building the company’s very profitable Chevrolet Tahoe, GMC Yukon and Cadillac Escalade large sport-utility vehicles.“We’re aware of the request and haven’t made changes to our production plans because we have protocols designed to keep the virus out of the facility and have multiple layers of protection in the plant to prevent a spread of the virus,” said company spokesman Jim Cain. “There’s no need to interrupt production.”GM restarted operations at its U.S. plants the week of May 18 as cases in the upper Midwest subsided. Arlington resumed production on May 25 and is getting ready to make all-new versions of its SUVs later this year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Weak fleet orders are expected to hurt June sales, which automakers will report on Wednesday. Cox Automotive forecasts fleet sales will fall nearly 56% to 1.3 million vehicles after plunging 83% in May and 77% in April. In the short term, fleet sales are not a major concern for automakers focused on ramping up production to beef up anemic dealer inventories for higher-profit sales to consumers.
(Bloomberg) -- Facebook Inc. fielded criticism from a growing number of consumer companies over harmful content on its sites, with Starbucks Corp. and Diageo Plc pulling back on ad spending and General Motors Co. planning to review its social media marketing strategy.Starbucks and Diageo followed Unilever, Coca-Cola Co. and several other companies in saying they will cut ad spending, part of an exodus aimed at pushing Facebook and its peers to limit hate speech and posts that divide and misinform. Microsoft Corp., which was Facebook’s third-largest advertiser last year, has paused global ad spending on the site because of concerns about ads appearing next to inappropriate content, according to a person familiar with the matter. The list of companies taking similar action lengthened on Monday. Britvic Plc, which supplies a wide range of soft drinks, Patreon Inc. and The Clorox Co. all said they will stop advertising on Facebook while GM said it’s “reviewing and reinforcing” its marketing guidelines.Read more: How to Go Cold Turkey on $77 Billion of Facebook Ads: Alex WebbWhile a single advertiser can do little to hurt a company that generated $17.7 billion in revenue last quarter, the rising tally creates peer pressure on other brands, and civil rights groups say they expect more corporations to join a boycott. Combined with a pandemic-fueled economic slowdown, the threat to Facebook is deepening.“Given the amount of noise this is drawing, this will have significant impact to Facebook’s business,” Wedbush Securities analyst Bradley Gastwirth wrote in a research note. “Facebook needs to address this issue quickly and effectively in order to stop advertising exits from potentially spiraling out of control.”Shares gained 2.1% Monday to close at $220.64 in New York, after dropping 8.3% on Friday. Unilever, one of the world’s largest advertisers, said it would cease spending on Facebook properties this year, eliminating $56 billion in market value and shaving the net worth of Chief Executive Officer Mark Zuckerberg by more than $7 billion.Facebook was already bracing for weakness in the second quarter, which ends this week. Chief Financial Officer Dave Wehner said in an April earnings call that he saw the “potential for an even more severe advertising industry contraction.”The number of coronavirus cases has surged in the intervening months, prompting many parts of the country to slow or roll back reopening efforts and giving advertisers added justification to rein in spending. Facebook’s sales will rise 1% in the June period, followed by a 7% increase in the third quarter, analysts predict, by far the smallest quarterly growth increases since the company went public.Advertiser boycotts in July could cost Facebook more than $250 million in the third quarter if 25% of its top 100 buyers pause spending, and as much as $500 million if 50% of the top advertisers stop, according to Bloomberg Intelligence analyst Jitendra Waral.Zuckerberg announced changes Friday designed to appease critics, but the Anti-Defamation League, one of the groups calling for the boycott, called the amendments “small.”Some analysts have said the financial impact of recent exits will be limited, citing past advertiser revolts. Even so, this exodus is distinct in key ways, Bernstein Securities analyst Mark Shmulik wrote in a research note Saturday. There’s heightened pressure to publicly demonstrate that brands stand with civil-rights groups, he said.“The current environment is very different,” Shmulik wrote. “It is very visible who is and isn’t participating in the boycott where brand silence [equals] being complicit.”(Updates to add Microsoft withdrawl in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A Maryland multimillionaire says the biggest legal transfer of wealth in American history has just gotten underway—here’s #1 step you must take.
(Bloomberg) -- A meeting between the chief executives of General Motors Co. and Fiat Chrysler Automobiles NV was put on hold after a federal appeals court blocked a judge’s order requiring them to confer face-to-face to resolve a lawsuit.U.S. District Judge Paul Borman in Detroit last week told GM’s Mary Barra and Fiat Chrysler’s Mike Manley to talk in person by July 1 to try to resolve the lawsuit over bribes paid to union officials, which he called a “waste of time and resources” during the coronavirus pandemic. He scheduled a videoconference with the two CEOs for that day to get an update on the talks.GM asked the U.S. Court of Appeals in Cincinnati to overturn Borman’s ruling and reassign the case to another judge. The court on Monday put a temporary hold on his order while it considers GM’s petition. GM said in a statement that it looked forward to the court’s review.Fiat Chrysler said in a filing after the ruling that courts have the authority to direct parties to engage in settlement talks and regularly do so.Read More: GM Rejects Judge’s Notion Fiat Lawsuit as a ‘Waste of Time’In addition, it said, while GM may be unhappy about questions Borman asked during arguments before his ruling, that doesn’t warrant his removal from the case. Fiat Chrysler noted that GM had asked to have the judge assigned in the first place, given his experience with the criminal cases that gave rise to its suit.“As we have said from the date this lawsuit was filed, it is meritless and FCA will continue to defend itself vigorously and pursue all available remedies,” the company said in a statement.Nine union and Fiat Chrysler leaders were jailed as a result of a federal corruption probe. In the suit, GM claims its rival got better contracts than competing automakers by bribing union officials. The added labor expenses increased GM’s costs by billions of dollars, the company claims.GM also alleges that the bribes pushed union officials to go along with a proposed merger between the two automakers that former Fiat Chrysler CEO Sergio Marchionne wanted but GM rejected. Fiat Chrysler Chairman John Elkann has publicly denied the allegations.(Updates with Fiat Chrysler filing and comment)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A U.S. appeals court on Monday stayed a lower court's order requiring officials from General Motors Co and Fiat Chrysler Automobiles to resolve GM's racketeering lawsuit. "In order to provide sufficient time to consider the matters raised in GM’s petition, and having considered the relevant factors, we conclude that a temporary stay is appropriate," the Sixth Circuit Court of Appeals said in a court filing. GM said in a statement that it looked forward to the appeals court's review and decision.
(Bloomberg) -- Tesla Inc. has grown from Silicon Valley gadfly to the world’s second-largest automaker by market capitalization in the decade since its initial public offering. It’s been a roller-coaster ride for the electric-car maker’s shareholders, who have experienced dizzying swoons on the way to record highs thanks in part to self-inflicted crises.“There’s always a lot of drama with Tesla, but they have spurred the auto industry on to embrace electrification as key to the future of mobility,” said Tony Posawatz, the former leader of General Motors Co.’s Volt plug-in hybrid program, ex-CEO of Fisker and current director at Lucid Motors Inc. “Whether they are profitable or not, they have impacted the luxury auto market forever more.”On June 29, 2010, Tesla made its debut as a public company -- the first initial public offering of a domestic automaker in a half century. The IPO price was $17 a share. Chief Executive Officer Elon Musk rang the Nasdaq opening bell, and the company’s lone electric car, the $109,000 Roadster, was on display in Times Square.A decade later, Tesla’s stock is trading at $959.74 a share, the company has grown to about 48,000 employees and its influence on the global auto industry is unprecedented. Despite plenty of doubters and some near-death experiences, Tesla’s $178 billion market valuation is second only to Toyota Motor Corp. among all carmakers.Tesla no longer makes the Roadster, but it sells four other models in markets around the world. Besides design, one of the company’s biggest advantage lies with its batteries: A version of the flagship Model S now boasts a range of more than 400 miles. No other electric car comes close.“Their products create a lot of enthusiasm among customers,” Posawatz said.As Wall Street waits for the company to report second-quarter production and delivery figures later this week, here are 10 key moments that shaped Tesla’s extraordinary decade.1) Government LifelineIn January 2010, the U.S. Energy Department awarded Tesla a $465 million loan as part of the Advanced Technology Vehicle Manufacturing Program that President George W. Bush signed into law two years earlier. The funding came at a critical time, with the nation was still clawing its way out of the Great Recession. In May 2013, Tesla paid off the entire loan with interest. The DOE program has now become a model of clean-energy stimulus spending.2) Fremont FactoryIn May 2010, Tesla stunned the world when it announced it was buying a shuttered auto plant formerly run by Toyota and General Motors Co. in Fremont, California, and Toyota was investing $50 million in the startup. The surprise deal was unveiled by Musk and Akio Toyoda, Toyota’s president, who flew in from Japan for the announcement. The Fremont plant still produces the bulk of Tesla’s cars, but the company now has a second car-assembly plant near Shanghai and is building a third close to Berlin.3) Car of the YearIn December 2012, Motor Trend named the Model S its 2013 Car of the Year. It was the first winner in the 64-year history of the award not powered by an internal-combustion engine. The nod showed established automakers that battery-powered cars could be more than just nerdy science projects and gave the Tesla brand a huge boost.4) The “Gigafactory”In September 2014, Tesla announced it had chosen Nevada as the site for the automaker’s first battery-production “gigafactory,” with Panasonic Corp. as its partner. The news capped fierce battle among states hoping to land the economic-development project. The plant demonstrated Tesla’s drive to vertically integrate its supply chain all the way down to the battery-cell level. Tesla is now making moves to establish its own cell-manufacturing operation in Fremont, and investors are eager to hear more at a “Battery Day” event in September.5) Musk’s iPhone MomentWhen Tesla unveiled the Model 3 sedan in March 2016, customers lined up in a way the world had grown accustomed to seeing consumers queue up for iPhones. The promise of a $35,000 mass-market car barely materialized -- the average transaction price is closer to $50,000 -- but the Model 3 managed to rival mainstream sedans on sales charts. The company is now trying to tap into a growing segment of the market with the Model Y crossover.6) Autopilot ScrutinyOn May 7, 2016, a devoted Tesla customer and former Navy SEAL, Joshua Brown, died when his Tesla Model S collided with a tractor-trailer in Florida. Tesla’s driver-assistance system Autopilot was engaged at the time, and the death was the first known fatality involving the technology. U.S. regulators investigated but found no defect. Autopilot continues to come under scrutiny, and several other fatalities in the U.S. have been linked to the system.Read more: Tesla Can’t Perfect Autopilot Without a Few Deadly Crashes7) Solar SiblingIn June 2016, Tesla announced it was making an offer to buy SolarCity, a solar-panel installer Musk founded with his cousins. The conflicts of interest were stark: Musk was SolarCity’s largest shareholder and the chairman of its board. SolarCity was struggling financially and Tesla had just unveiled the Model 3, but Musk pitched the acquisition as a “no brainer” and announced a new tiled-roof product to sell investors on the acquisition. The rollout of the Tesla-branded roof has been slow, and the deal itself continues to be contested, with a lawsuit by Tesla shareholders slated to begin next month in Delaware Chancery Court.8) “Funding Secured”As foreshadowed by Musk’s prediction the previous fall that Tesla would find itself in “production hell,” 2018 was a crazy year. Tesla struggled to mass-manufacture the Model 3 and built an assembly line under a massive outdoor tent to boost output. Scores of executives left. In July, Musk called a British cave diver a “pedo guy” on Twitter, triggering a defamation lawsuit. The following month, Musk shocked investors and his own executives when he tweeted about taking Tesla private at $420 a share and said he had “funding secured.” Three weeks later, in a late Friday night blog post, Musk backtracked and said Tesla would remain public. A month later, the U.S. Securities and Exchange Commission sued Musk for securities fraud. The settlement stripped Musk of the chairman role for three years -- meaning that Musk could become chair again in late 2021.9) Shanghai ShowingTesla scored a major win in the midst of all the 2018 drama by becoming the first American automaker to be allowed to build a manufacturing plant in China without a local joint-venture partner. Tesla’s factory near Shanghai started delivery of its first vehicles on Jan. 7, one year after breaking ground. China is the world’s largest auto market and a huge part of Tesla’s future growth plans.10) Cybertruck SmashIn November, Musk unveiled the futuristic Cybertruck, an angular pickup shaped far differently than a Ford F-150. The real show stopper was when Franz von Holzhausen, Tesla’s long-time design chief, smashed two of the truck’s ostensibly shatterproof windows with a metallic ball. The botched demo generated an enormous amount of buzz. Tesla wants to build a plant for the Cybertruck in the U.S., and sites in Texas and Oklahoma are the two finalists.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Does the June share price for General Motors Company (NYSE:GM) reflect what it's really worth? Today, we will estimate...
General Motors Co <GM.N> on Friday asked a U.S. appeals court to allow it to continue pursuing its civil racketeering suit against rival Fiat Chrysler Automobiles NV <FCAU.N> <FCHA.MI>, rejecting a lower court judge's belittling of the complaint. The automaker's filing with the Sixth Circuit Court of Appeals comes less than a week after U.S. District Court Judge Paul Borman called GM's suit against Fiat Chrysler a "waste of time and resources" at a time when both automakers should be focused on surviving the coronavirus pandemic. Borman ordered GM Chief Executive Mary Barra and Fiat Chrysler CEO Mike Manley to meet by July 1 to negotiate a resolution.
While Dodge and Kia hold the top positions in the influential 2020 J.D. Power Quality Survey, Tesla takes the last spot.
The automaker unveiled the all new version of America’s top selling vehicle at an online event on Thursday night, claiming the new all F-150 is targeting the most “towing, payload, torque and horsepower of any light-duty full-size pickup,” all the while providing a completely new interior and technology package, updated exterior styling, and productivity tools like an integrated power generator, and tailgate that doubles as a workbench.
Lordstown Motors Corp is showing its planned electric pickup truck at an event on Thursday as the startup seeks to begin producing vehicles at a former General Motors factory in northeastern Ohio. Lordstown Motors, which hopes to start delivering the electric pickup to customers by January 2021, will face significant competition from other automakers. Also on Thursday, Goodyear Tire & Rubber Co announced a strategic relationship with Lordstown Motors and said it would acquire new Endurance vehicles for its fleet.
Lordstown Motors Corp unveiled its future electric pickup truck at an event on Thursday as the startup seeks to begin producing vehicles at a former General Motors <GM.N> factory in northeastern Ohio. Lordstown Motors, which hopes to start delivering the electric pickup to customers by January 2021, will face significant competition from other automakers. U.S. Vice President Mike Pence was driven on stage in the pre-production Endurance vehicle on Thursday in the politically important state.
(Bloomberg) -- In a cavernous Northeast Ohio factory that General Motors Co. abandoned last year, a small group of engineers is coaxing dormant robots back to life -- one by one -- in a long-shot bid to build a new type of pickup truck.Here, in the middle of the Rust Belt, the small, untested company hopes to build electric vehicles where GM once employed 10,000 at its peak, turning out Impalas and Firebirds -- and, when the end came, compact Cruzes.So far, the fledgling company, Lordstown Motors, has hired just 70 full-time employees, and no one thinks it can bind up all the economic wounds that have hit the region time and again.But the company’s Chief Executive Officer, Steve Burns, says he gave the commercial truck a name with that history in mind: “a dual meaning about the endurance of the people of the region.”Truck RevealThe Endurance will be unveiled Thursday, though it’s a working protoype ahead of planned production in 2021. Vice President Mike Pence is scheduled to attend the reveal at the plant, which became a national story in recent years because of President Donald Trump’s attention to it.As recently as June 19, the chairman of the Federal Reserve, Jerome Powell, spoke virtually with community leaders about their ongoing struggle to revitalize the area.“The Lordstown closure served as a reminder of how interconnected local economies can be,” Powell said.By the time GM shut down production in March 2019, its ranks had dwindled to about 1,500, and most of those workers either retired or transferred to plants in states including Tennessee, Indiana or Kentucky.Economic ChallengesThe new company sits in the village of Lordstown and is just one of several enterprises that economic-development officials are counting on to change the narrative about the region, where the nearby city of Youngstown has long been a symbol of decline for the America’s Rust Belt.Youngstown has lost almost two-thirds of its population since the 1950s, hurt by the collapse of the local steel industry. In April, with Covid-19 taking a toll, the metro area charted among the nation’s slowest personal income growth. The jobless rate, which had recovered from the last recession, soared to 19.8% that month.Development officials are fostering a hub of logistics companies and suppliers near the factory.GM and South Korea’s LG Chem Ltd. are investing $2.3 billion in a venture called Ultium Cells LLC to make batteries for electric vehicles. Old Dominion Freight Line Inc. is building a new facility next to the battery plant, retaining about 50 area jobs and adding 40 more.“We’re trying to build a whole eco-structure around this new kind of vehicle,” Burns said in a June 5 interview.GM’s ClosureThe arrival of the Covid-19 pandemic has only added to the challenges of an already frayed local economy, where the wounds from GM’s closure are still raw for former workers.“It saddens me -- I have a lot of heartache and I still miss our home,” said Christina Defelice, choking back tears in a March telephone call on the anniversary week of GM’s departure.She mentioned the irony of Trump’s words from a Youngstown rally in July 2017, when he told people “Don’t sell your house” because he’d bring jobs back to Ohio. She and her husband Robert Defelice definitely kept their house -- but now there are renters in it because the couple had to transfer to a GM foundry in Bedford, Indiana.Mindy Miller hasn’t worked in more than a year since she drove GM’s final car, a white Cruze, to its parking place outside the factory. She had to move from her two-bedroom townhome to the basement of her grandmother’s house in nearby Niles.Both Defelice and Miller say they wish the new Lordstown Motors well, even if the number of jobs and level of wages never match what GM offered. “I’d like Lordstown Motors to really boom, and this area be the hub, and bring jobs back,” Miller said.Reviving FactoryAt the new company, Burns’s engineers and consultants are retooling the assembly lines GM left behind to start handling pickups instead of small cars. In addition to the current 70 employees and 100 contractors working at the plant now, he plans to hire as many as 600 line workers for production next year.Burns previously ran Workhorse Group Inc., an EV company near Cincinnati that’s bidding to build a U.S. Postal Service mail truck. It has a 10% stake in Lordstown Motors and some shared intellectual property.GM helped Lordstown Motors fund the factory purchase with a $40 million loan, but the startup doesn’t yet have all the money it needs.As of early June, Burns was still working with investment bankers in Cleveland to try to secure the financing to build 30 test vehicles by December and start production next year. The number of pre-orders is already close to supporting a full year of production, he said, declining to be more specific ahead of this week’s unveiling.The company is even considering an initial public offering, something Burns’s crew thought unlikely until this month’s stunning market reception to the listing of Nikola Corp. That Phoenix-based startup, which wants to build an electric semi truck, briefly surged as high as $34 billion in market valuation, surpassing Ford Motor Co.“That’s a topic of conversation among us,” Burns said of a potential IPO. “Wall Street normally doesn’t like companies that are that far ahead of revenue, but it’s just proving to be a hot space.”Read More: Electric Trucks Could Displace 100,000 b/d of Oil by 2023Worker DisplacementThe plant’s story is part of the broader evolution of worker displacement, diversity and inequity in pay, health care and education happening in the Youngstown area and many other American cities -- all of which have become more apparent in the era of Covid.“For working-class communities, which have always understood that racial and economic justice are linked, this is all coming to the forefront now,” said Tim Francisco, director of Youngstown State University’s Center for Working Class Studies, which is run alongside a museum documenting the region’s once-dominant steel industry. “People are tired of the inequity,” he said last week.The factory continues to generate political controversy. GM has come under pressure from the state of Ohio to return $60 million in public subsidies it received while it owned the facility, and as recently as last week U.S. Senator Sherrod Brown, an Ohio Democrat, was criticizing GM and Trump administration trade policies for the closure.Trump carried Ohio about 8 points in 2016 but his support has waned, with a Fox News poll on June 3 showing him trailing Democrat Joe Biden by 2 points. A Quinnipiac University poll of Ohians released Wednesday shows Trump behind by 1 percentage point.The administration’s response to the pandemic and to racial unrest following incidents of police violence are part of the reason, Francisco said, noting that people of color and women make up much of the workforce in health-care, food-processing and other essential industries that have been under stress for months.“We really have gotten the sense in this community that no one is going to parachute in and save this community, or any other de-industrialized community,” Francisco said. “What does make me optimistic is that I think in this town, in Youngstown, for the first time we see philanthropy united with economic development, united with education, trying to figure out a way forward that isn’t dependent on one large industry coming in to save us.”(Updates with Quinnipiac poll on Trump-Biden in third to last paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The U.S. National Highway Traffic Safety Administration (NHTSA) said on Wednesday it has opened two investigations into reports of headlight failures in 392,000 Kia Sorento sport utility vehicles and steering issues in 781,000 General Motors vehicles. NHTSA said it had received 74 reports of sudden, unexpected loss of headlights in model year 2011-2013 Kia Sorento vehicles including some while drivers were making a turn or traveling on the highway. Kia did not immediately comment.