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Frustrated GM investors ask what more Mary Barra can do

DETROIT — General Motors Co Chief Executive Mary Barra has transformed the No. 1 U.S. automaker in her almost five years in charge, but that is still not enough to satisfy investors. Ahead of third-quarter results due on Oct. 31, GM shares are trading about 6 percent below the $33 per share price at which they launched in 2010 in a post-bankruptcy initial public offering. The Detroit carmaker's stock is down 22 percent since Barra took over in January 2014. After hitting an all-time high of $46.48 on Oct. 24, 2017, the shares have declined 33 percent. In the same period, the Standard & Poor's 500 index has climbed 7.8 percent. Several shareholders contacted by Reuters said GM could face a third major action by activist shareholders in less than four years if the share price does not improve. "I've been expecting it," said John Levin, chairman of Levin Capital Strategies. "It just seems a tempting morsel to somebody." Levin's firm owns more than seven million GM shares. Barra has guided the company through the settlement of a federal criminal probe of a mishandled safety recall, sold off money-losing European operations, and returned $25 billion to shareholders through dividends and stock buybacks from 2012 through 2017. GM declined to comment for this story, but the company's executives privately express frustration with the market's reluctance to see it as anything more than a manufacturer tied mainly to auto market sales cycles. GM's profitable North American truck and SUV business and its money-making China operations are valued at just $14 billion, excluding the value of GM's stake in its $14.6 billion Cruise automated vehicle business and its cash reserves from its $44 billion market capitalization. The recent slump in the Chinese market, GM's largest, and plateauing U.S. demand are ratcheting up the pressure. GM is one of the few global automakers without a founding family or a government to serve as a bulwark against corporate raiders. In 2015, a group led by investor Harry Wilson pressed GM to launch a $5 billion share buyback, and commit to what is now an $18 billion ceiling on the level of cash the company would hold. In 2017, GM fended off a call by hedge fund manager David Einhorn to split its common stock shares into two classes. Einhorn, whose firm still owned more than 21 million shares at the end of June, declined to comment about GM's stock price. Other investors said there were no clear alternatives to Barra's approach.

New Buick Envision model spotted in China, expected here this year

At GM Capital Markets Day in February, GM North America president Barry Engle said the U.S. market can expect "updated models of Chevrolet Equinox and Traverse, Buick Envision and Enclave, as well as GMC Terrain." We've seen the Equinox and Traverse, and although we weren't aware, we've seen the Envision. Buick showed an EV crossover concept in 2018 called the Enspire, and it was thought to preview an eventual production model called the Enspire that's been spotted in various places testing under heavy camouflage in the U.S. GM, in fact, applied to trademark the Enspire name twice in the U.S. The model's final production form got an early reveal in China thanks to the Ministry of Industry and Information Technology, and according to GM Authority, a branding redirection has led to the crossover being called the Envision. Assuming this is the model that comes to the U.S., it will share dealer space with the current Envision imported from China. Motor1 writes that Chinese site Auto Home alleges the name Envision S will distinguish the new product, and the tailgate in the low-res photo plausibly shows an S after the model name. That doesn't mean it would get the S suffix here, though. It's not clear if the coming crossover grows in size compared to the standard Envision the way the Encore GX expanded a touch over the Encore. The marquee difference will be that the new Envision is more luxurious in looks, equipment, and features. There are few details, but it's thought the Envision S sits on the same E2 platform as the Cadillac XT4, and will use the same 2.0-liter turbocharged four-cylinder in the Cadillac paired with the automaker's nine-speed automatic. In the XT4, that mill produces 237 horsepower and 258 pound-feet of torque, but across all its applications in the GM stable it makes anywhere from 230 to 237 hp.    What we can see is that the new CUV takes the Envision name in a more dynamic direction, starting with a trim upper front fascia that puts narrow headlights astride a wide grille clearly derived from the concept, the lower front fascia with chrome-lined outer intakes that recall the Aston Martin DBX. A diffuser-looking silver trim piece in front is mirrored in back. A sloping roof helps create the slim profile, leading to a trim backlight, thin taillights, and strong horizontals on the bumper that emphasize width.

Trump prods General Motors over its auto plants in China

WASHINGTON — U.S. President Donald Trump, who is engaged in a trade war with Beijing, said on Friday that the largest U.S. automaker, General Motors, should begin moving its operations back to the United States. "General Motors, which was once the Giant of Detroit, is now one of the smallest auto manufacturers there. They moved major plants to China, BEFORE I CAME INTO OFFICE. This was done despite the saving help given them by the USA. Now they should start moving back to America again?" Trump said in a post on Twitter. Trump appeared to be referring to a Bloomberg News story that reported GM's hourly workforce of 46,000 U.S. workers has fallen behind that of Fiat Chrysler as the smallest of the Detroit Three automakers. Over the past four decades, GM has dramatically cut the size of its overall U.S. workforce, which numbered nearly 620,000 in 1979. GM did not directly comment on Trump's tweet. "GMÂ’s China operations are not a threat to U.S. jobs," the company said in a fact sheet, noting that its joint ventures have sent $16 billion in equity income to GM since 2010 and that it has invested $23 billion in U.S. operations since 2009. GM's U.S. hourly workforce has fallen by about 4,000 jobs since the end of 2018 to about where it was a decade ago. Trump's ire with GM comes as contract talks with the United Auto Workers union with the Detroit Three automakers intensify ahead of a Sept. 14 deadline. Trump has previously attacked GM for building vehicles in Mexico and for ending production at plants in Michigan, Ohio and Maryland and threatened to cut GM subsidies in retaliation. GM's decision to close four plants in the United States is a central issue in the contract talks. Trump has made boosting auto jobs a key priority and has often attacked automakers on Twitter for not doing enough to boost U.S. employment. His 2020 re-election bid will hinge on holding key industrial battleground states like Wisconsin, Pennsylvania and Michigan that narrowly voted for him in 2016. China is the worldÂ’s largest auto market, and government policy favors automakers assembling vehicles there, and not importing them from overseas. In response to TrumpÂ’s latest tariffs, China said last week it will reinstitute 25% tariffs on U.S.-made vehicles. The U.S. is imposing 15% tariffs on more than $125 billion in Chinese goods starting Sunday. GM sold 3.6 million vehicles in China last year accounting for 43% of its worldwide sales.