Detroit automaker General Motors (GM) has announced plans to spend $691 million on its Canadian engine plant located outside of Toronto.
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The plant, situated in St. Catharines, Ontario is a propulsion plant that makes V-8 engines for full-sized trucks and sport utility vehicles (SUVs). GM, as the company is known, says the updates will allow the Canadian plant to produce the next generation of engines needed for many of its bestselling vehicles.
General Motors has three main engine plants. In addition to the Canadian location, the company also produces engines for its vehicles in Buffalo, New York and Flint, Michigan. The major investment in Canada comes as tariffs imposed by the U.S. government have raised concerns about the future of the Canadian automotive sector that is closely intertwined with manufacturing in neighboring Detroit.
GM’s Long-Term Commitment to Canada
GM Canada said in a news release that the nearly $700 million investment confirms the company’s long-term commitment to Canada and that automotive production will remain in the Canadian market for many years to come.
General Motors has also announced new investments at its plant located in Oshawa, Ontario that produces pick-up trucks. However, another GM plant in Ingersoll, Ontario is sitting idle after it ended production of electric delivery vans late last year.
Is GM Stock a Buy?
General Motors stock has a consensus Moderate Buy rating among 19 Wall Street analysts. That rating is based on 14 Buy, four Hold, and one Sell recommendations issued in the last three months. The average GM price target of $95.72 implies 25% upside from current levels.
