The US auto industry continues to benefit from a number of fundamental tailwinds, including a steady economic recovery, low interest rates, and low gas prices. Unsurprisingly, both Ford Motor Company (NYSE:F) and General Motors Company posted strong earnings for the past year. Surprisingly, however, both stocks have followed a negative trajectory in the past one year, leading to a potentially attractive valuation.
General Motors Co. announced Tuesday Mary Barra will take over as its new chief executive early next year, making her the first female to take the helm of a major global automaker.
Ms. Barra, 51, will succeed Dan Akerson in the role when he steps down as chairman and CEO on Jan. 15, 2014, the company said.
The decision comes one day after the U.S. Treasury announced it had sold its remaining common stock in the Detroit automaker stemming from the US$60-billion government bailout of the company in 2009 during the economic crisis.
General Motors Company (NYSE:GM) is set to become the first key US car manufacturer to import China-made vehicles for the American market, after finalizing new terms with United Auto Workers (UAW) union. Although the deal should escalate the automaker’s labor expenses, General Motors’ recent move is not intended to reduce costs.
However, is it a wise decision? Bidness Etc takes a look at the opportunities and threats of the move.