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Why General Motors Stock Is Rising Today

By John Rosevear - Updated May 5, 2020 at 12:15PM

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Will GM reopen its U.S. factories on May 18? It's looking more likely.

What happened

Shares of General Motors (GM -0.47%) were rising on Tuesday, ahead of its earnings report, on new developments that make it more likely that GM and the other Detroit automakers will be able to restart production in the U.S. later this month.

As of 1:00 p.m. EDT, GM's shares were up about 4% from Monday's closing price.

So what

Fiat Chrysler Automobiles (FCAU) said on Tuesday morning that it plans to reopen its factories in North America during the week of May 18 -- and the president of the United Auto Workers (UAW) labor union didn't object.

That's a big development for all of the Detroit automakers. GM, Ford Motor Company (F -0.46%), and FCA have been in ongoing discussions with the UAW and the governments of several states about the timing of restarting production at idled plants.

Barra, wearing a mask and safety glasses, is shown touring GM's improvised mask factory last month.

CEO Mary Barra hasn't said much about GM's first-quarter results or its plan to reopen factories. Investors seem to be assuming that her silence means that good news is coming. Image source: General Motors.

For the most part, the details of the discussions haven't been made public, but it has been reported that the Detroit automakers have wanted to restart production on May 18 and that the UAW's insistence on protection for workers and extensive testing have been sticking points.

With the UAW's president now signaling assent, it appears that the plans to reopen will move forward.

GM, Ford, FCA, and other automakers shut down production in North America in mid-March amid the outbreak of COVID-19. All three companies are believed to be losing $100 million or more per day while their factories are idled.

Now what

Auto investors won't have to wait long for updates from CEO Mary Barra and CFO Dhivya Suryadevara: GM will report its first-quarter earnings before the market opens tomorrow.

John Rosevear owns shares of Ford and General Motors. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

General Motors Company Stock Quote
General Motors Company
$36.06 (-0.47%) $0.17
Ford Motor Company Stock Quote
Ford Motor Company
$15.30 (-0.46%) $0.07
Fiat Chrysler Automobiles N.V. Stock Quote
Fiat Chrysler Automobiles N.V.

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