General Motors Co. (GM) is delaying the resumption of second shifts at truck assembly factories in Michigan, Indiana and Mexico due to a shortage of parts from Mexico, Reuters reported.
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The news comes after the Detroit automaker on Monday resumed production after shutting down operations in March because of the coronavirus pandemic.
Next week, General Motors is planning a second shift only at its Lansing Delta Township plant, according to the Reuters report. It will not immediately begin, the planned second shifts on Monday at its Ft Wayne, Indiana, Flint and Silao, Mexico plants that build full-size trucks, but could resume a second shift only as early as later next week.
GM spokesman Dan Flores told Reuters: “demand for our full size picks has been very strong so we are certainly exploring ways to add production and will do that when it makes sense.”
All of this is happening as Mexican auto parts production is only this week beginning to slowly resume. GM’s decision to delay resuming some production shifts shows the challenges of resuming production with thousands of suppliers.
Last week, GM suppliers were told the company planned to resume three-shift production at it Fort Wayne plant and other plants as soon as June 1.
Shares in GM rose 0.7% $25.98 in U.S. trading on Friday, trimming its year-to-date decline to 28%.
Argus Research analyst Bill Selesky maintained his Hold rating on the stock, saying that depressed economic growth and waning consumer confidence should “further accentuate” weaker car sales trends, as consumers will probably defer large discretionary acquisitions.
Overall though, TipRanks data shows that the rest of Wall Street analysts are cautiously optimistic about GM’s stock. The Moderate Buy consensus is based on 8 Buys, 3 Holds and 1 Sell. The $30.60 average price target implies 18% upside potential in the shares in the coming year. (See GM stock analysis on TipRanks).
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