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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.

Despite strong profits, GM still fighting flat market share

Looking at the progress General Motors has made since it entered bankruptcy, it's easy to forget that the company still has a long way to go before it's the juggernaut it once was. A recent report from Reuters points out that, while GM is making money, it isn't making any gains in terms of US market share. Quite the opposite, really. Consider this factoid: In 1963, nearly half of the cars sold in the United States were from Chevrolet, Cadillac, Buick, GMC or Pontiac. Now, the company's US market share is stagnant at 17.9 percent. That same number is half of just Chevy's 1963 market share. This is all despite GM going on a binge replacing or updating its models. "Market share increases are not instantaneous," Mark Reuss told Reuters at the 2014 Detroit Auto Show. "We've got a lot of baggage. Don't underestimate what people though of us, or these brands, through these hardships and 30 years." The reasons for the stagnant market share are numerous. Reuters points out that retooling of factories and a focus on limiting incentives are both good things for profit, but not necessarily for market share. There's also the troubling turnover of the brand's marketing department. These issues don't change the fact that Chevrolet has lost 1.4 percent of its market share in two years, and that Cadillac - arguably GM's most improved brand overall - has lost 1.2 percent in the same period. Part of that can be blamed on GM's avoidance of fleet sales in favor of more profitable customer sales. "Our focus has really been on retail and that's where we've got the growth," said Alan Batey, GM's interim global marketing boss. "We want to grow GM and that means growing market share and profits, but it's not at all costs," Reuss said. News Source: ReutersImage Credit: paul bica - Flickr CC 2.0 Earnings/Financials Buick Cadillac GM GMC sales profits

Cadillac CT6 uses aluminum to save 200 pounds

In Cadillac's recently launched ad campaign, the luxury brand's tagline is "Dare Greatly," and the two words suggest a brand willing to take big swings, even if they don't always connect. From what the company is promising, the forthcoming CT6 seems like an embodiment of that new motto. With an eventual range of turbocharged engines, reportedly including a turbo V8, a possible plug-in hybrid and streaming rearview mirror, the sedan is certainly pitched as tech showcase. Of course, extensive use of aluminum is practically mandatory to play in the luxury field these days, and Caddy is proving its latest creation can do that too. Despite the weighty appearance of the sedan's squared-off exterior, 64 percent of the CT6 is aluminum, including the entire exterior. Caddy claims that using so much of the lightweight metal sheds 198 pounds off the scales compared to using conventional steel. There still is some steel in the CT6; although it's predominately the high-strength variety. The engineers use the heavier metal for portions around the cabin and B-pillar for added safety. Cadillac also claims using steel "close-out panels" on lower portions of the sedan make the cabin quieter without needing as much sound deadening. The buildup to the CT6's public unveiling has been a long time coming after Cadillac pinned the flagship (for now) sedan's debut at the New York Auto Show nearly a year ago. When the sheet finally comes off on March 31, we get the first good idea about just how great Caddy's latest act of daring really is. Cadillac CT6 Elevates the Science of Mass Efficiency 2015-03-13 Technology DETROIT – Cadillac will use an advanced mixed-material approach for the lightweight body structure of the upcoming CT6 range-topping sedan. The structure is aluminum intensive, but the new Cadillac also includes 13 different materials customized for each area of the car to simultaneously advance driving dynamics, fuel economy and cabin quietness. The CT6 will debut March 31 at the New York International Auto Show and go into production late this year at General Motors' Detroit-Hamtramck assembly plant. "This is the rocket science of automobile construction and manufacturing today," said Cadillac President Johan de Nysschen.