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Frustrated GM investors ask what more CEO Barra can do

Oct 21

Frustrated GM investors ask what more CEO Barra can do

General Motors Chief Executive Mary Barra has transformed the No. 1 US automaker in her almost five years in charge, but that is still not enough to satisfy investors.
Ahead of third-quarter results due on October 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 .SPX 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 capitalisation.
The recent slump in the Chinese market are ratcheting up the pressure.