I am sure that GM's decision to close factories was a tough call to say the least. The auto industry has always had the problem of adjusting production to high cyclical auto demand, but Barra is making the right moves.
The decision to reduce production had to be a gut wrenching choice for Barra to make, but it was essential for the long-term viability of the company. Like many industries, the auto business is changing. Moreover, the increasing pace of technological change is causing significant pressures. Businesses must adjust and must adjust quickly if they are to remain viable. Businesses and industries that are not staying with or ahead of change risk their extinction. Thus, Barra's move is essential.
Adding tariffs into the mix is causing even more challenges. The auto market are highly subject to many of the tariffs from both a raw material and component perspectives. CEO's in all industries are rapidly adjusting their businesses to avoid risks posed by tariffs. While no CEO will publicly confirm these strategic moves at the risk of being called out by President Trump, you can be assured that it is being addressed behind the scenes.
Unfortunately, the tariffs are no longer just a negotiation tactic. They are having serious ACTUAL effects. Many of the actual tariff effects may not yet be overt to investors, but you can be assured that tariff avoidance is being intensely pursued.
Sears failed to adjust to their environment and suffered the consequences. Over time, it can be shown that most companies that have failed have failed because they didn't stay ahead of a changing environment.
Thus, GM is staying ahead of the crowd and making the right moves.
