Auto stocks soar on GM cuts

Shares of U.S. automakers soared Wednesday as investors took comfort in GM's announcement that it was slashing its work force and production and suspending its dividend in an effort to stay afloat in an increasingly difficult market.

Shares of GM surged $1.56, or 15.9 percent, to $11.40 in afternoon trading. Ford shares gained 76 cents, or 16.3 percent, to $5.41.

"GM is a name where there has been a lot of potential buyers sitting on the sidelines," Calyon Securities analyst Mark Warnsman said in an interview. "It's a tough stock to get in front of, and perhaps yesterday's announcement gave folks hope that perhaps we've hit bottom."

Hit bottom? As we have said for years, the top brass at Detroit’s Big 3 are complete and utter failures. They have no vision. It's called reactive management. They react after it's too late. Meanwhile the foreign manufacturers continue to gain ground and/or pull away.