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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.

The GMC Hummer EV is big and fast; it's also a social conundrum

Pedestrian fatalities, unresolved safety issues, overachieving and overweight trucks — overweight electric trucks — and divisive attitudes about vehicles equipped as is the new Hummer EV, are very much on the mind of Robinson Meyer. Mr. Meyer, who suggests that the 1,000-horsepower pickup is a cross "between an ambulance and a race car," is a staff writer for The Atlantic, a well-respected, long-lived journal founded in 1857. His recent essay in the monthly's flagship magazine starts off describing a scary video clip posted online by Edward Barseghian that features the 9,000-pound Hummer hurtling full tilt towards three lanes of cars idling at a light (the driver stops it in time). Then he goes on to pretty much berate the machine. "The Hummer EV haters and lovers had discovered one of the most important facts about electric 'super trucks': They are very heavy, and they go very fast," he writes. "If you imagine an ambulance that can accelerate as fast as a Formula 1 car, youÂ’re imagining a vehicle only slightly more unwieldy than the new Hummer." Meyer goes on to discuss the issue of allowing battery powered vehicles that weigh as much as the Hummer does onto public roads. "The weight of EVs is a safety issue that drivers — and cyclists and pedestrians — will only have to keep worrying about as these cars go mainstream," he explains. "Suffice it to say that cars as huge as the Hummer EV need to face some kind of regulation, especially in cities and towns, where they pose a distinct threat to the public." To Hummer devotees, them's fightin' words. But Meyer takes pains to present a sort of response from Anthony Schiavo, a research director at Lux Research, a global advisory firm: Why is the Hummer so heavy if its batteries weigh only about 3,000 pounds? “ItÂ’s absolutely a design choice and a marketing choice,” Schiavo answers. “People like larger vehicles, and the reason why those larger vehicles are getting made is because they sell.” The author concludes by bringing into his thesis the issues of climate change, liberal and conservative politics. In some places, his arguments wander; they become muddled. But for those enthused about electrics and big trucks, "Frankenstein's Hummer" is worth a read. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

GM will compensate SUV owners for fuel-economy error [UPDATE]

General Motors will offer debit cards to owners of some of its crossover SUVs after it was discovered that GM overstated the vehicles' fuel economy on window stickers, Automotive News says. GM will offer reimbursements to about 135,000 customers that are worth between $450 and $1,500 each. Some owners will also have the option of being provided with an extended warranty free of charge instead of the debit card. GM overstated fuel economy on about 170,000 vehicles by one to two miles per gallon because of what it has said was an inadvertent error stemming from not factoring the impact of emissions-related hardware into the EPA window-sticker figures. As a result, GM put a temporary stop-sale on the Chevy Traverse, GMC Acadia, and Buick Enclave before switching out the window stickers on about 60,000 vehicles. Automotive News says letters and debit cards will be sent out next week, and Reuters is estimating that the reimbursement program will cost GM about $100 million. With automakers ranging from Hyundai/Kia to Ford to, more recently, Volkswagen and Mitsubishi being ensnared by emissions or fuel-economy-rating issues, GM is working quickly to address the problem. For those curious, the reimbursement totals, factoring in current gas prices, the SUVs' combined fuel economy, and typical driving of about 12,000 miles a year, will provide between three and 12 months worth of free gas for those drivers (the models get either 17 or 18 miles per gallon combined, depending on front- or four-wheel-drive configuration). While about 135,000 customers will be reimbursed, Automotive News says the fleet buyers of about 35,000 crossovers haven't been addressed yet. UPDATE: GM spokesman James Cain, in an e-mail to Autoblog on Sunday, confirmed that the company will reimburse about 135,000 customers. Purchase customers will be given the option of a pre-paid debit card or a 48-month/60,000-mile protection plan, while lease customers will be offered the pre-paid debit cards. Most of the cards will have a value of between $450 and $900 on them. "We want all of our customers to have a great ownership experience, so we designed this reimbursement program to provide full and fair compensation in a simple, flexible, and timely manner," he wrote.