General Motors Company (GM - Free Report) announced that it will be shifting the production facility of Chevrolet Camaro sports car to the Lansing Grand River Assembly plant, Michigan from the original plant in Oshawa, Ontario in Canada. The decisions were taken by the company to lower capital investment and improve production efficiencies.
Camaro is the only rear-wheel drive vehicle assembled at Oshawa and accounts for about 25% to 30% of the total production. The Oshawa plant, which employs 2,000 workers, also produces Buick Regal. It will start manufacturing Cadillac XTS in the near term.
The Lansing plant, which employees 1,600 workers, currently produces rear-wheel-drive Cadillac. The shift in production facility will directly affect the workers and production volume of the plant. Owing to this crisis, the Canadian President called for replacement of production. General Motors stated that it will continue with the production commitment with the Canadian government and provincial Ontario government, agreed in 2009.
General Motors posted a 9.7% decline in earnings (excluding special items) to 93 cents per share in the third quarter of 2012 from $1.03 in the corresponding quarter a year ago. However, earnings outpaced the Zacks Consensus Estimate of 61 cents.
Profits ebbed 5.9% to $1.6 billion from $1.7 billion a year ago due to lower profits from North America and higher losses in Europe. Revenues grew 2.5% year over year to $37.6 billion, surpassing the Zacks Consensus Estimate of $36.3 billion. The improvement was driven by an increase in worldwide sales volume to 2.3 million units.
Detroit, Michigan-based General Motors is the largest automobile manufacturer in the world and one of the ‘Big Three’ U.S. automakers. The company's significant exposure to troubled Europe has adversely affected its operations in the continent.
The automaker, which competes with Ford Motor Co. (F - Free Report) , currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock.