Shares of General Motors (NYSE:GM) were falling in trading on Tuesday afternoon as investors considered the possibility that GM may need to shut down its U.S. factories for an extended period due to the coronavirus outbreak. Concerns about U.S. relations with China, where GM has a massive presence, likely added to the selling pressure.
As of 1:30 p.m. EDT, GM's shares were down about 6% from Monday's closing price.
Here are the stories that are likely affecting GM's stock price on Tuesday afternoon.
- In a letter to members, the United Auto Workers said Tuesday that it has asked GM, Ford Motor Company, and Fiat Chrysler Automobiles to shut down its U.S. plants for two weeks in response to the coronavirus outbreak. The union said it will use "any and all measures" to protect its members. Any UAW action could well target GM: The UAW mounted a 40-day strike against GM last year over a contract dispute.
- GM shut down its technical center campus in Warren, Michigan after an employee tested positive for the COVID-19 virus. The site is being deep-cleaned and reopened, likely by the end of the day on Tuesday. GM said that the employee's colleagues will be directed to self-quarantine for 14 days. The company's medical team will help coordinate care as needed.
- The Chinese government said that it will expel a number of U.S. journalists in the latest sign that U.S.-China relations are deteriorating. GM is one of China's largest automakers.
Ford and Fiat Chrysler have both begun shutting down plants in Europe in response to the growing epidemic there. It's quite possible that they and GM will follow suit shortly in the United States -- especially if the UAW pushes the issue.
All three automakers have already been hit hard by the virus pandemic, but U.S. factory shutdowns would lead to massive additional losses for GM and its U.S. rivals. Any disruption of GM's China operations would only add to the pain.
For auto investors, it's a sobering moment.