On Monday, General Motors (GM) announced its plans to invest $71 million in two Ohio manufacturing facilities, which will enable the company to retain 240 jobs in the region. The company will invest $39 million at its Toledo transmission plant and $32 million at its Defiance casting plant.
The Toledo investment will be used to upgrade and enhance the production of General Motor’s eight-speed rear-wheel-drive transmission. Meanwhile, the investment in the Defiance plant will prepare the facility for future engine casting components work.
In its press release, the company highlighted the fact that it has invested over $3.3 billion in Ohio since 2009 and that last year it paid over $450 million in taxable wages to employees in Ohio. General Motors currently has more than 3,800 employees in the state.
Monday’s announcement came as the Ohio Tax Credit Authority asked General Motors to refund $28 million in tax incentives and to pay $12 million for community support programs in northeast Ohio where the company closed its Lordstown assembly plant in 2019. GM sold its Lordstown Assembly plant and production equipment to Lordstown Motors Corp. for the production of the latter’s Endurance electric pickup truck.
Last year, General Motors announced a joint venture (called Ultium Cells LLC) with LG Chem, which will invest over $2.3 billion to build a new, state-of-the-art battery cell manufacturing plant in Lordstown. This battery manufacturing plant will create more than 1,100 new jobs. The company disclosed that the construction of the facility is underway. (See GM stock analysis on TipRanks)
On Sept. 10, Barclays analyst Brian Johnson increased the price target for General Motors to $39 from $34 and maintained a Buy rating. The analyst feels that the company should consider a separate electric vehicle skateboard business, as well as Cruise, “that could unlock some of the inherent value.”
General Motors stock has declined 19.6% since the start of this year. The average analyst price target of $36.79 indicates an upside of about 25% ahead. The Street has a Moderate Buy consensus for General Motors based on 11 Buys, 3 Holds and 1 Sell rating.