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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.

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).

Cadillac exec realizes ELR pricing was stupid high

At least one Cadillac exec has finally started to come to terms with something we knew all along: the initial $75,000 price for the ELR plug-in hybrid was way too high. The bad decision in part led to the model selling just over 1,000 units last year. Company marketing boss Uwe Ellinghaus recently gave an interview to Bloomberg where he discussed what went wrong. "The MSRP was, indeed, a mouthful," Ellinghaus said to Bloomberg. "We overestimated that customers would realize our competitors were naked at that price." People balked at the ELR's price from the very start, and dealers were receiving $5,000 at one point just for getting customers to test drive the PHEV. Later, some incentives for buyers were as high as $14,000. Cadillac planners saw a conundrum when it came to the ELR's price. Too low of a figure was thought to bring the model close to the Chevrolet Volt, and $75,000 was also believed to signal Caddy's PHEV as something special. "We just wanted to make this a statement for the brand of how progressive we are," Ellinghaus said to Bloomberg. Cadillac is now working to rehabilitate the ELR's reputation with a host of updates for 2016. Buyers get a 25-percent boost in powertrain output, additional standard features, and the whole package comes with a $9,000 drop in price. The tweaks should help the luxurious PHEV make a better second impression. Related Video: