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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.

Buick Encore GX fuel economy out, 1.3L more efficient than 1.2L

EPA fuel economy ratings for the 2020 Buick Encore GX are out, the most powerful engine taking the overall trophy. The new, slighty-less-compact subcompact crossover comes with a turbocharged 1.2-liter three-cylinder as its base engine, putting out 137 horsepower and 166 pound-feet of torque. Available solely with front-wheel drive and with a continuously variable transmission, the powertrain gets 26 miles per gallon in the city, 30 on the highway and 28 combined. The optional engine is a turbocharged 1.3-cylinder with 155 hp and 174 lb-ft. Mating it to the CVT in front-wheel drive guise returns the best fuel economy in the Encore/Encore GX family, being 30 city, 32 highway, 31 combined. That's spot on GM's prediction last year for combined fuel economy. Buyers who opt for the 1.3-liter with all-wheel drive — the engine costing an additional $395, the drivetrain a $2,000 upgrade — get a nine-speed automatic transmission, that combo returning 26 mpg in the city, 29 mpg on the highway and 28 mpg combined. Among luxury front-wheel drive entries, the 2020 BMW X1 sDrive28i gets 27 mpg combined utilizing an eight-speed automatic, the Lexus UX 200 gets 33 mpg combined with a CVT. Among less the expensive options, the Nissan Kicks returns 33 mpg as well through a CVT, the Mazda CX-30 rated at 28 mpg combined and employing a six-speed auto. The Encore once offered two versions of its turbocharged 1.4-liter, but is now left with the lesser-powered unit producing 138 hp and 148 lb-ft, paired with a six-speed automatic. Fuel economy with front-wheel drive is 25 city, 30 highway, 27 combined; with all-wheel drive, that shrinks by one mpg across the board to 24 city, 29 highway and 26 combined. The Encore GX is scheduled to hit dealership sometime this spring. Related Video:

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.