UAW Deal Done, GM (GM) Looks To China

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Now that GM (GM) has its UAW deal in hand, it is hinting that getting its North American business back in shape still may take several years. "It has a chance to significantly improve our competitive position," said Rick Wagoner of the new union contract. "It is going to play out over a period of several years." Investors probably hoped that the improvement of GM’s domestic business would happen faster than that.

Wagoner pointed to the obvious markets to help offset slow US sales. GM hopes to sell over one million vehicles in China this year, according to Reuters. The company also said its sales in Brazil are growing over 20%, but the market there is much, much smaller than in the US and China.

As long as China leaves US companies operating in that country alone, things should go fine. That is a big question mark.

Douglas A. McIntyre