Editor's note: the automobile industry is facing a new round of changes, and more and more people are focusing on Tesla, Inc..、 XPeng Inc. 、 NIO Inc.For traditional car companies, the market is getting narrower and the competition pressure is increasing. General Motors Co, as an established car company,There is often news of layoffs and factory closures. What kind of situation is General Motors Co in at present? How is it changing itself? What are the new business growth points in the future? This article will answer for you one by one. The original article is published on Market Mad House by Daniel, entitled: Is GM Doomed to Oblivion?
At present, General Motors Co is the only major carmaker in the United States that has not joined an important international alliance, which is not a good thing.
Italian carmaker Fiat Chrysler is communicating with the French Peugeot Citroen Group on the merger, which will become a strong competitor to General Motors Co in the future. Meanwhile, FordCooperation with Volkswagen, the world's largest carmaker, is growing.
By contrast, General Motors Co is withdrawing from the stage of cooperation in international relations. In 2017, General Motors Co sold his Opel and Vauxhall to Peugeot Citroen.
In the increasingly global auto industry, General Motors Co has become a car company focused on the US market, which may put General Motors Co at a disadvantage in the market competition. Is General Motors Co going out of business?
At present, General Motors Co is trying to improve the situation through large-scale restructuring. General Motors Co laid off 14000 employees and closed seven factories in 2019, NBC Business Channel reported.
In addition, General Motors Co plans to cut 814 jobs at his assembly plant in Hamtramark, Michigan, USA Today reported. General Motors Co laid off staff to reorganize the factory and produce electric cars.
However, the Detroit Free News points out that some of General Motors Co's business is growing. General Motors Co's General Defense Corp. (GM Defense) is one of the three finalists for a $155 million order to build 2065 infantry fighting vehicles for the U.S. Army. Infantry fighting vehicles are armored off-road vehicles that can transport soldiers on the battlefield. Is General Motors Co growing?
The infantry fighting vehicle made by GM Defense is modified from a Chevrolet Corolla ZR2 medium-sized pickup truck.
In addition to GM Defense, Oshkosh Defense (Oshkosh Defense), Flying Bird Defense (Flyer Defense), Scientific applications International (Science Applications International), Polaris Government and Defense (Polaris Government and Defense) are also competing for orders for the infantry fighting vehicle. GM Defense's future plans include building electric cars for the military.
In addition to defense, General Motors Co plans to invest $1 billion to build new Chevrolet Colorado and GMC Canyon medium-sized pickup trucks in Wintsville, Missouri. General Motors Co plans to spend $500m to provide suppliers with tools and machinery to support the Wenzville plant, Detroit Freedom reported.
Pickups are crucial to General Motors Co's future. The best-selling pick-up trucks in the United States are the Ford F-Series and the Dodge Ram pickup. According to media statistics, between January and September 2019, Ford sold 661574 F-Series pickups and Fiat Chrysler sold 461115 Dodge Ram pickups.
It should be pointed out that the third best-selling pickup in the United States is General Motors Co's Chevrolet Silverado pickup. Between January and September 2019, General Motors Co sold 412259 Chevrolet Silverados.
In today's auto market, General Motors Co needs to upgrade his pickup truck in order to survive and make money. Most importantly, General Motors Co needs to find new ways to sell his pick-up truck to ordinary Americans.
Is General Motors Co making money?
The answer is yes. General Motors Co is making money. In fact, General Motors Co's quarterly report released on September 30, 2019 shows that the company has quarterly revenue of $3.5473 trillion, operating profit of $2.304 billion, after-tax operating profit of $2.311 billion and gross profit of $4.312 billion. It is worth noting that the gross profit for the quarter was down from the gross profit of $4.589 billion in the previous quarter.
Does General Motors Co have plenty of cash flow?
General Motors Co, a cash-rich company, reported operating cash flow of $6.553 billion on September 30, 2019, compared with $5.076 billion in the previous quarter.
In addition, General Motors Co's cash flow was $2.718 billion as of September, compared with-$600m as of June. However, the financing cash flow as of the third quarter was-$2.133 billion.
As a result, General Motors Co has a lot of cash, which is unique to a carmaker.
The owners of carmakers have a lot of cash because people need to pay cash every month to prevent their cars from being repossessed. As a result, General Motors Co has sustained cash flow, which is why Warren Buffett likes it.
Buffett's company-Berkshire HathawayHold 5.1% of General Motors Co's shares, a total of 72269696 shares. Buffett owns General Motors Co stock because General Motors Co received cash from his business.
Another reason Buffett likes General Motors Co is that the company has remaining liquidity or cash at the end of the quarter, and that number is growing. Is General Motors Co a growing company?
General Motors Co's income and profits are growing, but the growth rate is declining. General Motors Co's income growth rate in the first three quarters of 2019 showed negative growth of-3.38%,-1.9% and-0.89%, respectively. As a result, General Motors Co has made more money, but his business is shrinking.
However, General Motors Co has seen growth in some interesting areas, including pick-up trucks, electric cars and military vehicles. In addition, General Motors Co has a self-driving car project called Cruise.
According to Wired magazine, Cruise from Softbank Corp. and HondaWhen investors raise 7.25 billion dollars. However, plans for Cruise's self-driving taxi service have been delayed. As a result, Cruise's project currently lags behind Ford's self-driving car program and Alphabet's Waymo project, and Ford and Alphabet are already testing self-driving cars on the road.
At present, General Motors Co has some important growth opportunities, which may enable General Motors Co to develop in the future. However, on the whole, General Motors Co seems to lag behind other major competitors. Is General Motors Co still worth investing?
I think General Motors Co is a valuable investment, because its stock price is relatively low, there is a lot of cash, but also valuable.
As of September 30, 2019, General Motors Co's total assets were $15.0964 billion.
In terms of stock price, it will cost $35.84 to buy General Motors Co shares on January 6, 2020, while Ford's market price is only $9.16 per share.
In addition, General Motors Co's dividend is in good shape. General Motors Co is not only a kind of value investment, but also can reap a good dividend. General Motors Co paid a dividend of 38 cents per share on December 5, 2019. General Motors Co will have a dividend yield of 4.07%, an annualized dividend of US $1.52 and a dividend yield of 31.19% by January 6, 2020, according to the dividend payout Network. However, General Motors Co's recent dividend has not increased.
Overall, General Motors Co is doing well, except that its strategy of focusing on North America limits its growth potential to some extent.
Translator: Yang Zhifang