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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.

Cadillac's de Nysschen takes aim at Porsche 911, Cayenne

Johan de Nysschen has big plans for Cadillac. He's moved the brand from Detroit to New York, revamped its model nomenclature, and planning a raft of new models for the near future – including a $250,000 luxury sedan to take on the likes of Rolls-Royce and Bentley. But the veteran executive of luxury automakers has some more performance-oriented machinery in mind, too. Speaking with Car and Driver at the Los Angeles Auto Show last week, de Nysschen suggested Cadillac could be ready to launch a flagship sports car sometime in the next decade. The halo model would take aim at the Porsche 911 and do for Cadillac what Audi did with the R8, Mercedes is doing with the AMG GT and Acura once did (and is aiming to do again) with the NSX. Just what form it would take remains a big unknown, but de Nysschen indicated that the brand would need to be built up further before the sports car would be launched, lest it emerge too detached from Cadillac's image. The last time Cadillac delved into that territory was with the Corvette-based XLR, of which it sold only 15,000 or so examples – far below initial targets. The 911 rival isn't the only performance model de Nysschen has in mind, however. He plans to further expand the V series into a more substantial sub-brand to include a crossover to take on the likes of the Porsche Cayenne Turbo, BMW X5 M and all those many AMG-tuned Mercedes utilities. The idea of an entry-level model to slot in below the ATS was mooted as well. A range of diesel engines are slated to help Cadillac break into overseas markets in similar fashion to how Maserati has expanded its market reach with oil-burning versions of the Ghibli and Quattroporte. And we wouldn't be surprised to see Cadillac get in on a new flagship SUV being launched by Opel in Europe, either.

New V6 engines are only the start at Cadillac

Cadillac debuted its new family of V6 engines Friday, but that's not all General Motors' luxury brand has in store for the coming years. The six-cylinder powerplants will certainly help Cadillac in the near term, but they're just two of the many parts of the company's future strategy. GM has invested $12 billion in Cadillac to help the brand grow over the next five years, and the company will launch eight new products between now and 2020. That all starts with the launch of the CT6 flagship later this year – a fullsize luxury sedan we'll see for the first time in New York on March 31. The CT6 will introduce several new features and technologies to the Cadillac range, and with its launch also begins the slow restructuring of Cadillac's model-naming system. The new nomenclature means CT and XT badges for cars and utilities, respectively. Cadillac says that of the eight new vehicles it plans to launch by 2020, five of them will be first-time offerings in market segments where the brand currently does not play. But it's not just about new products – new powertrains are an important part of the Cadillac story, too. After the new V6 engines – a naturally aspirated 3.6-liter and a twin-turbocharged 3.0-liter engine – launch later this year in the 2016 ATS, CTS and CT6, the company says it has a strategy for V8 power – possibly a twin-turbo application – as well as future electrification. Cadillac also says it's working on adding four- and six-cylinder diesel powertrains, though it's unclear which vehicles will make use of those engines. This new six-cylinder engine family is indeed important, with Cadillac's chief engineer, David Leone, calling it the "most advanced V6 in the industry." With 335 horsepower, the 3.6-liter engine is the highest output, naturally aspirated V6 powerplant Cadillac has done – and that's SAE-certified, and on regular fuel. Beyond that, the 3.0-liter mill (pictured at right) marks the first application of GM's active fuel management system on a twin-turbocharged engine. This means that when full power isn't necessary, the TTV6 can run as a 2.0-liter V4 in order to save fuel. New transmissions are also part of the V6 engine story. GM's all-new eight-speed Hydra-Matic 8L45 gearbox will be paired to the 3.6-liter V6, and the 3.0-liter TTV6 will use the company's existing 8L90 transmission that is already found in the Chevrolet Silverado and GMC Sierra pickups (with the 6.2-liter engine).