GM (GM) suffered an analyst downgrade today. Goldman Sachs moved the shares from "buy" to "neutral". In a way, it is a surprise that it did not happen sooner.
On September 10, GM traded at $29.10. Yesterday, the stock got as high as $35.47.
The stock has rocketed on assumptions that negotiations with the UAW would go well, allowing GM to drop its North American production costs lower, on a per vehicle basis, to near where they are at Toyota (TM) or Honda (HMC). But, the union cannot afford to see GM fail, so some significant level of concession was always in the cards.
Since the beginning of the labor talks housing defaults have spiked sharply, auto sales have fallen, consumer credit has risen, and oil has moved to $81.
Wall St. wants to know who GM is going to sell cars to all of those poor, homeless people.
Douglas A. McIntyre
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