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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.

2020 Cadillac XT6 Sport Drivers' Notes | We have many mixed opinions

The 2020 Cadillac XT6 is Cadillac’s long-awaited answer to the numerous three-row luxury crossovers that have been on sale for years. It is not a shrunken Escalade. Instead, GM decided to pull one of its other well-used platforms for duty, with the XT6 being most similar to the GMC Acadia underneath. That means the Cadillac is rolling with similar running gear, too. Under the hood is a 3.6-liter V6 making 310 horsepower and 271 pound-feet of torque, mated to a nine-speed automatic transmission. Front-wheel drive is standard, but our Sport model has an upgraded all-wheel-drive system. It also has some other special mechanical bits to make it better than the standard XT6. For example, the Sport trim has continuously variable dampers that stiffen in Sport mode. That upgraded all-wheel drive system adds twin clutches on the axles to facilitate torque vectoring. And the steering ratio is changed to 15:1, as opposed to the 16:1 ratio used on Premium Luxury trim models. This XT6 Sport also features some exterior and interior finishes not seen on other XT6 models. Black trim dominates outside, headlined by a large, black mesh grille. Then on the inside, we get real carbon fiber trim. There are plenty of cool features like CadillacÂ’s Night Vision and the rear camera mirror, but Super Cruise still isnÂ’t available as an option on this Cadillac. GM has promised a wider adoption of Super Cruise for its lineup in the future, but weÂ’re not there yet. Before options, our XT6 Sport came in at $58,090, including the $995 destination charge. The $3,700 Platinum package adds semi-aniline leather seats, a suede headliner and premium carpeting throughout the cabin. A $2,350 Enhanced Visibility and Tech package brings us the eight-inch instrument cluster digital display, a head-up display, rear camera mirror, rear pedestrian alert and an automatic parking assist feature. Then, a $1,300 Driver Assist package adds adaptive cruise control and enhanced automatic emergency braking, including rear braking. Our car also has the $750 Comfort and Air Quality package, which adds heated rear seats, cooled front seats and an air ionizer for the cabin. The pretty Red Horizon Tintcoat costs $1,225, and the fancy Night Vision option adds another $2,000. That brings us to our grand total of $71,190.

Dealers mobilize to protect their margins from automaker subscription services

Six individual auto brands — Lincoln, Cadillac, Porsche, Mercedes, BMW and Volvo — have established or are trialing a vehicle subscription service in the U.S. Three third-party companies — Flexdrive, Clutch and Carma — run brand-agnostic subscription services. And three automakers — Mercedes-Benz, BMW, and General Motors — have also launched short-term rental services. Dealers, afraid of how these trends might affect their margins, are building political and lawmaking campaigns to protect their revenue streams. So far, three states are investigating automaker subscriptions, and Indiana has banned any such service until next year. It's certain that those three states are the first fronts in a long political and legal battle. Powerful dealer franchise laws mandate the existence of dealers and restrict how automakers are allowed to interact with customers to sell a vehicle. On top of that, Bob Reisner, CEO of Nassau Business Funding & Services, said, "Dealers and their associations are among the strongest political operators in many states. They as a group are difficult for state politicians to vote against." In California earlier this year, the state Assembly debated a bill with wide-ranging provisions to protect against what the California New Car Dealers Association called "inappropriate treatment of dealers by manufacturers." One of those provisions stipulated that subscription services need to go through dealers, but that item got stripped out when dealers and manufacturers agreed to discuss the matter further. In Indiana, Gov. Eric Holcomb signed a moratorium on all subscription programs by dealers or manufacturers until May 1, 2019, to give legislators more time to investigate. Dealers in New Jersey have taken their campaign to the state capitol, asking that the cars in subscription programs get a different classification for registration purposes. Automakers run the current subscription services and own the vehicles. Sign-ups and financial transactions happen online or through apps, leaving dealers to do little more than act as fulfillment centers to various degrees, with little legal recourse as to compensation amounts when they're called on to deliver or service a car. That's a bad base to build on for business owners who've sunk millions of dollars into their operations.