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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 applies for 'Enspire' trademark for the second time

When we wrote about the Buick Enspire concept debut in China earlier this year, we said "we wouldn't be surprised to see either an all-new crossover, or a redesigned current model, sporting the designs seen on this concept." Now it appears General Motors might be planning to go with Option A. GM Authority discovered a trademark application for the name "Enspire," to be applied to "Automobiles, excluding motor homes." This is the second time GM filed for the name, the first being in 2015. As always, applications don't mean certainties. However, we know Buick has a range of new models in development, it's losing the LaCrosse sedan and its crossovers sell quite well. If there's to be a new vehicle called Enspire, it shouldn't be hard to guess what kind it would be. GMA's previous investigations picked up clues that there'll be two new Buick crossovers, one about the size of the China-sourced Envision and sitting on the E2 platform that supports the Cadillac XT4, Chevrolet Malibu, and Buick Regal. Based on data in an IHS Automotive document, the site said the putative Enspire's platform code is E2UB, the U for utility vehicle, the B for Buick. The other crossover would sit above an Envision, below the Enclave, on the short-wheelbase C1 platform employed by the Cadillac XT5. We can probably take the Enspire concept's design cues as a preview of the future, if not its electric drivetrain. Designers carved the wide, formidable stance with curved and elongated versions of traditional Buick brand cues, such as the grille crossbar stretching into the headlights. A futuristic, art-filled and screen-heavy interior contrasts with genuine wood, and is probably best not to look at because Buick couldn't bring anything like it to production. The electric drivetrain included a 550-horsepower electric motor and enough battery to power a 370-mile range. Those figures seem a little outlandish given the potential price tag and the Buick badge. Besides, GM has other plans for a dedicated EV powertrain in development that should bow around 2021, and a Buick EV based on the Chevrolet Bolt's BEV II architecture. As such, a conventional powertrain seems more likely for an Enspire crossover, at least initially. The same IHS Automotive document said the E2UB vehicle would go into production in Shanghai in late 2019.

GM expanding Lansing Lambda CUV plant

Considering that crossovers are a rapidly growing portion of the US auto market, it's not surprising to hear that General Motors is preparing to build even more of them. The company is investing $63 million to expand its Lansing Delta Township Assembly plant that builds Lambda platform CUVs like the Chevrolet Traverse, GMC Acadia and Buick Enclave.
According to GM, the expansion will add roughly 263,000 extra square feet of space to the plant. Of that, 181,000 square feet will be for an updated body shop with cutting-edge robots. There will also be 54,000 square feet of additional room in the paint shop and 28,000 square feet of more area for general assembly.
GM isn't saying as much, but there is the possibility that this extra space could allow for additional models produced at the factory. Cadillac reportedly dropped plans to build a three-row SUV on the Lambda platform earlier this year, however, dealers for the luxury brand were recently pitched the possibility of adding large and small CUVs, an ATS convertible or a sedan below the ATS.