Barclays Maintains an 'Overweight' on General Motors (GM); Focus Now Shifts to Attrition

Barclays maintains an 'Overweight' on General Motors (NYSE: GM) price target of $38.00.

Barclays analyst says, "Further GM-UAW contract is, with some puts and takes, roughly in line with our first take, focus now shifts to attrition: The UAW held a press conference this morning during which further details of the contract emerged. On the near-term costs, some puts and takes leave us roughly where we were earlier in the week, with a conservative (assuming only 1000 skilled trade retirees) 4c cost headwind, versus a 3c headwind we saw earlier. Importantly, with the cap on lower-paid Tier 2 workers lifted and a buyout program for Tier 1 workers, attrition could materially lower GM's all in labor cost over the contract period - with a 15% Tier 2 mix (from one-half of the 10,000 skilled trades retiring) GM's labor costs would fall by about $300 mn annually. We believe GM remains inexpensive."

For more ratings news on General Motors click here and for the rating history of General Motors click here.

Shares of General Motors closed at $22.43 yesterday.

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