What happened
General Motors (GM -0.04%) stock is down today, and it might have rival Ford Motor Company to thank for that. GM shares lost as much as 4.5%, and were still off by 2.6% as of 3:10 p.m. ET.
So what
Both GM and Ford have been accelerating plans to add electric vehicles (EVs) to their product lineups. GM has said it will convert its entire fleet of light-duty vehicles to be emission-free by 2035. Today, Ford announced layoffs that investors may be seeing as an indication of the changes that business decision will spur. Potential future layoffs for GM may be giving investors a feeling of uncertainty of what's to come. Investors never like uncertainty.
Now what
Ford said it would be cutting about 3,000 jobs as it further transitions to an EV company, reports The Wall Street Journal. Late last year, GM said it had committed to invest $35 billion in its EV and autonomous vehicle efforts. The company expects to have more than 30 new EV models introduced globally by 2025.
Ford's move to cut costs is likely to be mirrored by GM as it also works to conserve cash as the transition in its product line evolves. GM reinstated its dividend on Friday after withdrawing it to conserve cash at the start of the pandemic. But in an effort to hold down spending, the new dividend is less than one-quarter of the amount prior to the cut in 2020.
Ford's announcement wasn't unexpected, and the job cuts will be among salaried workers and contractors, according to the report. But it is a reminder that there will be major changes still to come as these legacy internal combustion-powered vehicle makers transition to electric. Layoffs and relationships with existing unions will add to the complexity. That uncertainty is likely impact the stocks along the way.
