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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.

GM recalling nearly 4,000 vehicles over airbag concerns

Four different General Motors vehicles from the 2012 model year are being recalled over a potential airbag issue. The driver's side airbag shorting bar in the 2012 Buick Verano and 2012 Chevrolet Camaro, Cruze and Sonic might make contact with the airbag terminals, even during a crash. If so, the airbag won't deploy when it should, possibly increasing injury to the driver.
The recall is expected to begin on February 13 for the 3,896 units that might be affected. GM will notify owners who can then take their vehicles to dealers to have the airbag coil replaced. A bulletin from the National Highway Traffic Safety Administration below has more info.

GM plans to restart production in Mexico on May 20

MEXICO CITY — General Motors is tentatively planning to restart operations at its auto assembly plant in the Mexican city of Silao on May 20, according to a message to workers seen by Reuters on Sunday, as the car industry prepares to exit the coronavirus lockdown. Separately, the president of GM's Mexican unit advised suppliers to prepare to resume operations. “We are now beginning a new phase given the Mexican governmentÂ’s official announcement earlier this week to consider the transportation manufacturing industry as essential for the countryÂ’s economy,” Francisco Garza, president ofGeneral Motors de Mexico, wrote in an email to suppliers dated on Friday that was viewed by Reuters. The reopening of the plant  in Silao would be a positive signal for the auto sector in North America, whose supply lines are highly interconnected between the United States, Mexico and Canada. The plant in the central state of Guanajuato has been idled for weeks due to the coronavirus outbreak. Workers had previously been told to plan to return to their jobs on May 18. A GM spokeswoman said the company could not confirm when it would restart operations at any of its facilities in Mexico because it is awaiting more guidance from the government. The message to the plant's workers came after the government on Friday clarified when the industry could begin easing restrictions imposed because of the health emergency. On Wednesday, the government said automakers could start going back into production from May 18. It then withdrew that advice and suggested the new start date would be June 1. Finally it indicated the sector, which forms the backbone of Mexican manufacturing, could begin operating as soon as next week if companies had the required safety measures in place. U.S. officials and its auto industry have pressed Mexico's government to get its factories open again because American operations depend heavily on parts from south of the border. However, some politicians are wary of opening too fast. Mexico registered its first case of coronavirus weeks after the United States and Canada and the toll of daily infections and deaths in the country reached new peaks over the past few days. The Silao production facility, which makes highly profitable pickup trucks for GM, is one of the biggest automotive plants in Guanajuato, a major Mexican carmaking state. Related Video: