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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.

UAW rejects GM contract proposal but makes a counter offer

The United Auto Workers union said a new comprehensive offer made by General Motors Co late Monday to end a two-week-old strike was not acceptable and said it had made a new counterproposal. UAW vice president Terry Dittes said in a letter to members "there are many important issues that remain unresolved." The union is awaiting GM's next proposal. He said GM's offer came up short on many issues.  Dittes said GM made a "comprehensive proposal" at 9:40 p.m. Monday. "This proposal that the company provided to us on day 15 of the strike did not satisfy your contract demands or needs. There were many areas that came up short like health care, wages, temporary employees, skilled trades and job security to name a few." Dittes is the union's vice president for GM relations and the UAW's lead negotiator in these contract talks. "We have responded today with a counterproposal and are awaiting GM's next proposal to the union," he wrote. "Regardless of what is publicized in print or social media, etc., there are still many important issues that remain unresolved." The strike, in its third week, has cost GM more than $1 billion, according to J.P. Morgan analyst Ryan Brickman. He said the cost per day in potential profit is $82 million. However, another analysis, by East Lansing-based consultant Anderson Economic Group, put the losses at $25 million a day. And the effects of the strike are expanding. GM said Tuesday the strike has created a parts shortage that forced the automaker to halt production at its pickup and transmission plants in Silao, Mexico, temporarily laying off 6,000 workers. Silao is where GM builds its highly profitable four-door crew cab Chevy Silverado and GMC Sierra pickups. The strike has also forced GM to idle some Canadian workers, and many suppliers have been forced to halt operations. About 48,000 UAW members went on strike on Sept. 16 seeking higher pay, greater job security, a bigger share of the leading U.S. automaker’s profit and protection of their healthcare. 

NHTSA ends GM steering investigation without seeking a recall

DETROIT — U.S. safety regulators have closed an investigation into sticky power steering on thousands of older General Motors SUVs and will not seek a recall. The National Highway Traffic Safety Administration says GM in 2014 issued “special coverage” to fix the problem on the Chevrolet Equinox, GMC Terrain and other models. The coverage replaced a steering gear with an improved one. The agency said a recall isn't needed because of the coverage and low complaint and warranty repair rates. The agency opened the probe in June of 2020 into steering problems affecting an estimated 781,000 of the SUVs from the 2010 through 2012 model years. Increased friction could make it feel like the steering wheel is stuck. But GM said the SUVs could still be turned, although with more effort than usual. “In view of the special coverage, low rate of failure and low potential hazard to drivers, this preliminary evaluation is closed,” the agency wrote in documents posted Wednesday on its website. Government/Legal Recalls Chevrolet GMC Safety