Interestingly, investors looking for potential future catalysts for both General Motors (NYSE: GM) and Ford Motor Company (NYSE: F) might just find their answers in the past.
While Stellantis is busy refocusing on its core vehicle production strategy and broader turnaround, both Ford and GM are busy diversifying and seeking new and incremental revenue streams
One catalyst with the potential to add billions in revenue and profit is the defense business. Here’s a brief history lesson on GM’s and Ford’s defense businesses and what reviving them could mean for long-term investors. General Motors and Ford have a history of serving the military Many forget that GM’s defense business delivered over $12.3 billion in war goods during World War II, at the time making it the largest commercial provider of military vehicles.
For an automotive industry already frowned upon for its cyclicality, GM’s defense business was even more boom or bust and was divested in 2003 to General Dynamics for $1.1 billion. Until 2017, when GM Defense was reestablished, you could say GM’s defense business was gone but not forgotten. But GM CEO Mary Barra dropped a hint in the automaker’s recent second-quarter letter to shareholders: “Growth businesses like GM Defense and GM Insurance are creating additional avenues for value creation,” she wrote.