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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 alerting truck and sedan owners to a do-over on brake recall

A recall campaign intended to address issues with braking systems on certain 2019 General Motors trucks and sedans may have introduced a new issue, the automaker has acknowledged, and thousands of owners driving repaired vehicles may need to return to their service departments for another update.  The update addresses a fix that was pushed out to owners of more than half a million brand-new GM trucks and sedans that could potentially lose partial braking function, according to the Detroit Free Press. The original software fix helped address situations where the vehicles' anti-lock braking systems would become disabled, which in turn would prevent electronic stability control from activating. Vehicles subject to the recall would often experience software glitches that prevented them from properly communicating the operational state of these systems, meaning drivers would have no idea that their brakes may not behave as expected in an emergency. The 2019 Chevrolet Silverado 1500, Cadillac CT6, and GMC Sierra 1500 were all recalled in the original campaign.  Unfortunately, the early version of this fix appears to have introduced yet another software glitch, indicating that the original fix did not do the trick. Those who have not yet had their cars serviced can rest easy; they will only receive the most up-to-date version of the software fix.  Related video    

GM pickup truck plant in Flint to add 1,000 assembly workers

FLINT, Mich. — General Motors said Tuesday it will add 1,000 workers to build new heavy-duty pickup trucks at its plant in Flint, Michigan, and will give priority to GM workers who were laid off elsewhere. The announcement comes the day after GM said it was starting to hand pink slips to about 4,000 salaried workers in the latest round of a restructuring announced in late November that will ultimately shrink its white-collar workforce in North America by 15 percent out of 54,000. GM has come under fire from U.S. President Donald Trump and Midwestern lawmakers for its plans to stop production at five North American factories and cut up to 15,000 jobs in all. The automaker has said it is trying to find new jobs for 1,500 U.S. hourly workers at the affected plants. Flint's truck plant could be a haven for many of these employees. Sales of heavy-duty pickups in the United States have grown to more than 600,000 vehicles a year, up more than 20 percent since 2013, according to industry data. Prices for luxury models can easily top $70,000. GM on Tuesday will celebrate the launch of a new generation of heavy-duty GMC and Chevrolet pickups at the assembly plant in Flint, Michigan, that is now building all such trucks for the company. Elsewhere in the company on Monday, two people briefed on the cuts in the white-collar salaried workforce said GM is cutting hundreds of jobs at its information technology centers in Texas, Georgia, Arizona and Michigan and more than 1,000 jobs at its Warren, Michigan Tech Center. GM is filing new required mass layoff notices with state agencies and disclosed the cuts to lawmakers. The largest U.S. automaker announced in November it would cut a total of about 15,000 jobs and end production at five North American plants. The cuts include eliminating about 8,000 salaried workers, or about 15 percent. GM cut about 1,500 contract workers in December and said 2,300 salaried workers accepted buyouts, officials said. "These actions are necessary to secure the future of the company, including preserving thousands of jobs in the U.S. and globally. We are taking action now while the overall economy and job market are strong, increasing the ability of impacted employees to continue to advance in their careers, should they choose to do so," GM spokesman Pat Morrissey said, adding the bulk of the cuts should be completed in the next two weeks. Morrissey said GM would provide salaried workers with severance packages and job placement services.