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General Motors Reopening Vital Mexican Plant

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General Motors Reopening Vital Mexican Plant

General Motors Co. (NYSE: GM) is reopening its Silao, Mexico plant on May 20. 

What Happened

Tentative plans are in the works to reopen the Silao GM plant on May 20, according to a message the automaker sent to its workers, as reported by Reuters.

The Mexican government had previously announced that automakers could restart production from May 18 but then revised the date to June 1. The government then backpedaled, saying carmakers could open as early as next week, provided required safety measures were in place.

Why It Matters

Officials in the United States, as well as its auto industry, have been exerting pressure on the Mexican government to reopen factories, as American auto-manufacturing is highly dependant on parts made in Mexico.

According to Reuters, GM’s Silao factory makes pickup trucks, which are highly profitable for the company, and is one of the biggest plants in Guanajuato, a Mexican state known for being an automotive hub.

Some politicians in Mexico remain wary of reopening the plants too fast. Mexico reported its first case of COVID-19 weeks after both the U.S. and Canada. Coronavirus fatalities have reached new highs over the past few days in the country.

Price Action

General Motors shares traded 0.49% lower at $22.52 in the after hours session on Friday. The shares had closed the regular session 1.43% higher at $22.63.

Image Credit: Courtesy of GM Authority.

 

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