If you’re concerned that General Motors (NYSE:GM) might not be willing to put its money where its mouth is on development, you can put those concerns to bed. GM plans to lay out a serious tranche into new developments and right away, too. Investors are modestly pleased with this development news as well, as GM is up slightly in Friday afternoon trading.
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The reports note that GM plans to shell out $918 million. Four of GM’s facilities will have a slice of this cash, with the bulk of it focused on Michigan operations. The breakdown is simple enough: over half, $579 million, will go to the Flint plant. Bay City will land $216 million. These plants are where a “sixth generation Small Block V-8 engine” is in the works. The Rochester, New York plant will land $47 million, and the Defiance, Ohio plant will take $12 million. Both plants are involved in new engine developments.
Since 2009, GM has invested over $300 million into its Bay City operations. That makes this extra $216 million a huge step forward. Plus, there will also be some extra cash going in that’s not related to V-8 engine development. Reports note that Defiance will get an extra $8 million for a “casting development cell” for future EV operations. Rochester, meanwhile, is in line for an extra $56 million for “battery pack cooling lines.”
No matter how you divide it up, Wall Street appears to be happy with General Motors. Analyst consensus calls GM stock a Moderate Buy with 18.48% upside potential thanks to its average price target of $42.64.
