The Credibility Rupture: Eight Days That Unravel a Thesis#

Management Forecasting Error on Display#

General Motors has delivered one of the automotive sector's more instructive lessons in forecasting humility. On the morning of October 21st, the company celebrated a Q3 earnings beat and raised its full-year earnings guidance to $9.75 to $10.00 per share, signaling confidence in sustained operational momentum and laying groundwork for a valuation re-rating that could justify multiples substantially above the sector average. Eight days later, GM announced that it would lay off more than 1,700 workers across its electric vehicle manufacturing operations in Michigan and Ohio, coupled with temporary layoffs affecting an additional 1,550 workers and the indefinite pause of battery cell production from January through mid-2026. The compressed timeline between the guidance raise and the capacity cut reveals a management team whose confidence in near-term business conditions has collapsed at a pace that suggests either the earnings call forecasting was premature or external developments moved with unexpected severity.