General Motors (GM) Mexico Truck Plant Down, Pay Hike Affirmed
General Motors GM confirmed the halt in production of light-duty trucks in its Silao-based plant. The production has been down since last week due to a scarcity of parts.
The Silao-based plant builds GMC Sierra and the light-duty Chevrolet Silverado. There is no hint of a halt in production at GM’s other truck plants based in Flint and Oshawa, Ontario. However, to proactively control inventory levels, GM announced to keep Fort Wayne, IN, truck plant shut for two weeks, starting Mar 27.
Production at the Silao-based plant is expected to resume by Mar 21. Dan Flores, GM’s spokesperson, said, "GM is actively working with our suppliers to resolve this supply chain challenge in order to meet high customer demand for our vehicles."
The automaker has reached an agreement with the local union to raise salaries in Silao plant. The 10% hike is one of the sector’s biggest recent raises in Mexico. Last year, the salary hike was 8.5%.
Speaking about the current raise the Silao union, SINTTIA said, “This overcomes the two-digit barrier that has not been reached in the automotive industry in many years.”
The raise at Silao plant will go into effect on Mar 25 for one year and is believed to restore the purchasing power of workers in the face of high headline inflation.
Nissan, Audi and Volkswagen are among the other automakers that have agreed to raise compensation by 9%, 9.4%, and 9%, respectively.
Zacks Rank & Key Picks
GM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
A few Zacks Rank #1 (Strong Buy) players in the auto space include Volvo VLVLY, Wabash National WNC and Modine Manufacturing MOD.
The Volvo Group is a manufacturer of trucks, buses, construction equipment, diesel engines and marine and industrial engines. The Zacks Consensus Estimate for VLVLY’s 2023 earnings imply year-over-year growth of 6.25%.
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimates for WNC’s 2023 sales and earnings imply year-over-year growth of 13.06% and 28.89%, respectively.
Modine operates primarily in a single industry consisting of the manufacture and sale of heat transfer equipment. The Zacks Consensus Estimates for MOD’s 2023 sales and earnings imply year-over-year growth of 11.43% and 43.09%, respectively.
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