NEW YORK (TheStreet) -- General Motors (GM) - Get Report shares are falling, down 0.8% to $37.55 in afternoon trading on Wednesday, after the United Auto Workers union's president rejected a lower wage tier proposal that was reportedly on the way from GM and the country's other large domestic car companies, Ford (F) - Get Report and Fiat Chrysler (FCAU) - Get Report.

The 390,000 active member strong union held its national bargaining convention in Detroit today where UAW president Dennis Williams said that the current two tier payment system was already too much as he is already under pressure by union members to end the second tier of wages, according to Reuters.

Under the current labor agreement, veteran workers earn a minimum $28 per hour while workers on the second tier earn about half of that with a $15.28 per hour starting wage.

Negotiations between the UAW and the top three domestic auto makers is set to begin this summer in a year when auto sales are expected to reach near all-time annual highs of 17 million vehicles sold compared to the 10 million that were sold in 2009.

Separately, GM announced yesterday that it will invest $350 million to build the next generation of its Chevrolet Cruze model in Mexico in an effort to take advantage of reduced labor costs and free trade agreements in the Latin American country, according to Reuters.

The company said that the current Cruze will continue to be made in Lordstown, OH, though workers at the company's South Korean Cruze plant said that they were evaluating the impact the Mexican plant will have on its production. The plant current produces between 70,000 to 80,000 vehicles annualy, well short of its 270,000 vehicle maximum capacity, according to union officals.

TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations, increase in stock price during the past year, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 91.0% when compared to the same quarter one year prior, rising from $1,040.00 million to $1,987.00 million.
• Net operating cash flow has slightly increased to $3,164.00 million or 3.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.41%.
• The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
• GENERAL MOTORS CO has improved earnings per share by 15.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $1.64 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($4.59 versus $1.64).
• Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.1%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
• You can view the full analysis from the report here: GM Ratings Report

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