Home » GM Is Back On Its Bullsh*t

GM Is Back On Its Bullsh*t

Rick Wagoneer
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There is no more flummoxing company than General Motors. On most days I’m pretty sure there is no better collection of engineers anywhere in the world than at GM. And yet GM is not the most successful car company in the world. What’s going on here?

Here’s a fun game: name the companies that were first to market with a daily-drivable-ish production electric car, a production turbocharged car, a touch-screen dash in a production car, and airbags? It’s a trick question because the answer is GM (EV-1), GM, GM, GM, and yet the company, to varying degrees, didn’t pursue those technologies until other people proved them to be popular.

Vidframe Min Top
Vidframe Min Bottom

And now comes the news that GM is back to handing out dividends to investors. Give me a break.

Oh, also speaking of giving me a break, I somehow missed that MotorTrend named the Blazer EV the SUV of the Year? What?

And then we’re gonna talk about the Nissan Leaf and a Jeep recall. I’m in a bit of a mood this morning and I’m now going to vent my spleen at the Lord so prepare thyselves.

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GM Announces Boosted Dividend And $10 Billion Stock Buyback

Investor Relations Meeting At Gm Tech Center
Photo: GM

Do you remember when GM as a company was clearly on the verge of collapse and it kept handing out dividends until freaking May of 2008 when the world was already on fire? Pepperidge Farms remembers.

For those of you who don’t follow the stock market, a dividend is basically when a company hands out a portion of its profits to shareholders. This often happens on a quarterly basis, and it’s not intrinsically a good or a bad thing. Some companies are in a stable position and aren’t in a situation where large investments will necessarily yield more value and therefore will pass money back to investors. Many companies don’t hand out dividends because those companies see a need for more investment. Tesla is one of those companies. Tesla doesn’t pay dividends.

And then there are companies that fall into the trap of doing share buybacks and handing out dividends to constantly boost their share prices when they should really be trying to improve their companies. Pre-Banktrucpy GM was famously one of these companies, though it’s not the only example. There’s also been Washington Mutual, Barnes & Noble, Kodak and many others.

So, it was a huge disappointment to see GM announcing a $10 billion accelerated share repurchase and that the company is increasing its dividends at the end of the year by 33% to 12 cents per share. There’s a whole letter from GM CEO Mary Barra explaining how, with the UAW strike settled and a clearer understanding of profits this year, the company can hand out some money. Here’s the highlight:

Now, with clarity on our labor costs and production back on track, we are returning to our capital allocation framework by repurchasing $10 billion of common stock through an accelerated share repurchase program, raising our common stock dividend by 33% starting in 2024 and reinstating our 2023 earnings guidance.

Cool, but what about all the stuff that’s not working?

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Although I am disappointed with our Ultium-based EV production in 2023 due to difficulties with battery module assembly, we have made substantial improvements both to the process and to the organization responsible for this work. In 2024, we expect significantly higher Ultium EV production and significantly improved EV margins. We are also addressing challenges at Cruise.

What Cruise has accomplished in the eight years since we acquired the company is remarkable. Our priority now is to focus the team on safety, transparency and accountability. We must rebuild trust with regulators at the local, state and federal levels, as well as with the first responders and the communities in which Cruise will operate.

I mean, what do I know, right? I’m just some schlub with a computer who doesn’t have to sit in a C-Suite and deal with angry investors. I actually worked in the Mortgage Back Securities industry on the back-end in 2005 and 2006 and saw that the whole thing made no sense and left the finance world in disgust, but I wasn’t smart enough to try to buy insurance like the people in “The Big Short” and make myself rich. If you can’t do, teach, and if you can’t teach I guess blog.

The world is a complex place and Barra deserves credit for winding her way through difficult times and restoring some faith in the company. But this is a huge step backward in my mind (and I‘m not the only one who thinks this is weird). Yes, the company’s truck and SUV business is very profitable and I also think their new EVs look very good, but if I were a GM shareholder I’d want them to invest as much as possible in hybrids and fixing their Ultium production. It’s nice that GM will be profitable this year and that the strike is only going to cost about a billion dollars, but in what universe does GM not need every cent to survive a future with Chinese automakers expanding in Mexico and Tesla showing no signs of slowing down?

This is cynical, but I suppose I should point out that this will almost certainly boost GM’s stock price (it has so far this morning) and, in 2022, Mary Barra was paid $2.1 million in salary and $14.6 million in stock options. Do with that information what you will.

Capitalism, when it’s done well, is ultimately a balancing act between the present and the future. What are you willing to do to make today survivable and how much will that harm your ability to survive in the future?

I’m not in GM’s C-Suite. I have no special insight or sources into what’s going on in the minds of executives and it’s possible that there’s enough pressure from the Board of Directors and from shareholders to provide immediate value and it’s just what the COO and CEO and executives have decided needs to be done to keep the stock price high enough to live another day.

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Maybe. But I’ve seen this before and, while GM is not in 2007-era bad shape, tomorrow isn’t promised to anyone, and the company better hope that Ultium and Cruise are all buttoned up and there are enough resources to keep the company alive through all the unpredictability of the future.

The Blazer Is The MotorTrend SUV Of The Year?

2024 Chevrolet Blazer Ev
Three-quarter view of 2024 Chevrolet Blazer EV RS in Galaxy Gray Metallic. Preproduction model shown. Actual production model may vary. 2024 Chevrolet Blazer EV available Spring 2023.

Here’s another line from that Mary Barra letter that caught me off guard:

As the EV market grows, we will have an exceptional, purpose-built electric vehicle line-up that is designed to win with customers. These include the Chevrolet Blazer EV, just named 2024 MotorTrend SUV of the Year, milestone vehicles like the Chevrolet Silverado EV, Chevrolet Equinox EV and the Cadillac OPTIQ, and a host of others in a wide variety of segments.

Excuse me? That underlined bit was a surprise to me.

The Chevy Blazer EV is the SUV of the Year? Technically, you can buy a Blazer EV. And maybe you should! I haven’t driven it and, after this episode of The Morning Dump, maybe I’ll never get the chance, but MotorTrend thinks it’s very good and they are excellent at evaluating cars.

Here’s what they said:

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Much more than an enlarged Bolt EV, the Blazer EV is far more viable for the needs of individuals and families everywhere. It’s not just because it establishes Chevrolet, once again, as a serious force in the EV space. Nor can its excellence be pinned on novel powertrain solutions or slick design details. It’s how these factors combine with overall product excellence that makes the Blazer EV our SUV of the Year.

I’m sorry, I can’t with this. The car looks really good and I wouldn’t be surprised if it was a great car. I was just driving around last night with my buddy in his newly purchased used Bolt I convinced him to buy and it’s an awesome product.

But the amount of credit given to GM here is way too high. Here’s a bit that really bugs me:

General Motors has already introduced a few vehicles on the Ultium platform,” Detroit editor Alisa Priddle said, “but this is the one where it applied lessons learned from the others—and even the Bolt EV—and created a winner.”

There are EV Blazers for sale and I am sure that, eventually, GM will get production rolling and it’s even smart of the company to make sure the cars will work before they sell them. But they haven’t yet and I don’t see a lot of mentions of Ultium delays in this write-up. I mean, look at the GM-supplied caption from that photo above. Spring 2023!

Even if you grant that Blazer EV sales are happening and that GM is being smart and prudent here, the main issue with electric car adoption is affordability and another $50-60,000 EV doesn’t solve this issue. I’m looking forward to the Equinox EV and I’m hoping the company can deliver that car at a reasonable price.

Of MotorTrend‘s criteria for judging these things, value is only one pillar of evaluation, but a Model Y starts at like $44k and the Blazer costs a lot more. Also, it’s MotorTrend‘s award and it’s ultimately meaningless so who cares? I do, obviously. [Ed Note: Automakers do, too. When I was at Chrysler, I recall the brands making a big deal of such awards. -DT]. So MotorTrend is the real winner here.

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Am I being too cynical here? I don’t know. But until GM can show they can actively make a lot of these things at scale and can bring down the price I’m a little confused by this call.

The Nissan Leaf Is Going To Reportedly Be A Crossover/SUV

Nissan Chill Out Concept
Render: Nissan

Apparently, Nissan’s Chill-Out concept was a preview of the new Nissan Leaf and, yeah, sure.

From Automotive News:

Nissan will tap into European tastes for crossovers with the next-generation Leaf in a styling shift it hopes will significantly boost demand.

The Leaf compact EV is the first of three high-riding, battery-electric cars that Nissan will build for European markets at its factory in Sunderland, England. It will be followed by an electric replacement for the Juke small EV, expected in 2025, and the next Qashqai, which is likely due around 2027.

The next Leaf will launch at the end of next year, a source at Nissan told Automotive News Europe. Nissan has not revealed an official launch date.

Make The Leaf Great Again! Or, maybe, Make The Leaf Great For The First Time.

Jeep Recalls 32,000 Wrangler 4Xes Over Fire Risk

Jeep Wrangler 4xe

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The Jeep Wrangler 4xe is the best-selling plug-in hybrid in America and that’s funny to me. It is. I’m not going to explain it, but I say it with love. I’m a 4xe fan.

Bad news from Consumer Reports if you’re an owner of one, however:

In a statement, the automaker says: “The vehicles may be driven. However, the company is advising owners to refrain from recharging these hybrid vehicles, and to park them away from structures and other vehicles, until they are remedied.”

Stellantis has identified eight fires with parked vehicles. In six of those cases, the Wrangler 4xe was connected to electric chargers.

The fix is a software update, and only 1 percent of the recalled group is estimated to have the problem.

So, that’s not ideal, but the good news I guess is that I’ve seen a ton of 4xes and I’ve never actually seen one plugged in.

The Big Question

Am I wrong? Am I wrong about the SUV of the Year thing? Am I wrong about GM? I could be wrong. It happens.

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Ben
Ben
4 months ago

I assume Shawn Fain is taking note of this stock buyback, and the timing of it, and will use that as a lever in the next negotiation.

67 Oldsmobile
67 Oldsmobile
4 months ago

“Am I being too cynical here?”
I would you’re the correct amount of cynical actually..

SoMuchBetterThanJalopnic
SoMuchBetterThanJalopnic
4 months ago

I’d like Autopian Car/SUV/Truck/Motorcycle of the year awards. Retroactively, starting whenever you want. But also starting today with current vehicles. Eventually, you’ll be more relevant than MT anyway.

Ottomadiq
Ottomadiq
4 months ago

GM Matt Is Back On Its His Bullsh*t

Last edited 4 months ago by Ottomadiq
Stef Schrader
Stef Schrader
4 months ago

For the sixth year in a row, my Car of the Year vote goes to the 1971 Volkswagen 411.

All y’all nerds who voted otherwise are wrong.

Knowonelse
Knowonelse
4 months ago
Reply to  Stef Schrader

In a tight race with the 1967 Volkswagen Type 3 squareback.

The F--kshambolic Cretinoid Harvey Park
The F--kshambolic Cretinoid Harvey Park
4 months ago

GM: “THE UAW IS BLEEDING US DRY!! WE’RE COMPLETELY PARALYZED BY LABOR COSTS!!! HOW CAN WE COMPETE!!!1?”

Also GM: “we’re spending $10bn to buy shares back, we’re also giving out even more money in dividends, and BTW we’re also leaders in the space and getting COTY awards.”

Which is it? Because those two things cannot both be true at the same time.

Fortune 500s are disgusting.

Dinklesmith
Dinklesmith
4 months ago

Definitely makes you realize Fain was correct to push for as much as he did

changedmynameasIworkinadealershipandsomeofourbrandsarentgreat
changedmynameasIworkinadealershipandsomeofourbrandsarentgreat
4 months ago

I just want to know if Mary Barra secretly daily drives a 6cyl BA Ford Falcon

Shooting Brake
Shooting Brake
4 months ago

Always fine to regard GM with a bit of extra skepticism Matt. This website doesn’t have an entire running blog series questioning their past choices for no reason…

Kommkat
Kommkat
4 months ago

GM also announced today that labor costs would increase by 10bn. So they did the obvious thing, and gave away 10bn to people who haven’t done anything to earn it.

DadBod
DadBod
4 months ago

I clicked on that Twitter link, and for some reason read a few comments then scrolled the feed and now I have to take a shower. Ick.

Mike TowpathTraveler
Mike TowpathTraveler
4 months ago

IMO: GM is going with high dollar-high content EV cars and trucks because they know the sales volume of these vehicles will be low. And thus, the risk of a bankrupting recall over some element of the ev system will be lessened. To do a more middle class-affordable car will be risking putting it’s neck on the line when some battery failure/fire requires the recall of every ev they made.

To go all-in with battery electric, to not go hybrid (Corvette being the exception), to not have an ice replacement for Camaro as Ford did with Mustang, is a fools folly that will see GM bought out by some Chinese company or simply Chapter 11’d into total dismantling.

NosrednaNod
NosrednaNod
4 months ago

but if I were a GM shareholder I’d want them to invest as much as possible in hybrids and fixing their Ultium production.

That just doesn’t accurately reflect how many stockholders feel.

JunkerDave
JunkerDave
4 months ago
Reply to  NosrednaNod

Most (by volume) stockholders are banks, mutual funds, pension funds, and other large financial organizations. They want to see growth this quarter. That’s where the bonuses are (for the C-suite too). They don’t give a crap about next year, if the company doesn’t do well they’ll just dump the shares and replace them with a different company.

ColoradoFX4
ColoradoFX4
4 months ago

Matt, you think you saw some interesting things back in the mid-aughts, I was working in subprime MBS at the time. Dumpsters on fire had more value than those securities.

DadBod
DadBod
4 months ago
Reply to  ColoradoFX4

My dog could get a mortgage in 2005, banks sent their own appraiser, zero down loans, it was freaking wild and so obviously broken

ColoradoFX4
ColoradoFX4
4 months ago
Reply to  DadBod

“No doc” loans were the thing. No income verification, barely identity verification. Pretty sure all you needed was a name. Buyers didn’t care, brokers didn’t care, originators didn’t care, servicers didn’t care, banks didn’t care, investors didn’t care. No one cared, until the entire house of cards came down.

Last edited 4 months ago by ColoradoFX4
The F--kshambolic Cretinoid Harvey Park
The F--kshambolic Cretinoid Harvey Park
4 months ago
Reply to  ColoradoFX4

Also 105% LTV so you could roll closing costs into the mortgage (and pay interest on it for 30 years).

Salaryman
Salaryman
4 months ago

Don’t forget, in 1983 MT declared “Le Car” as COTY.

There are many more wonderful choices as well.

Slow Joe Crow
Slow Joe Crow
4 months ago
Reply to  Salaryman

I think it was the Renault Alliance or Encore that COTY but it still shows Motor Trend’s award to be payola rather than merit but twas always thus since I was reading Car and Driver harshing on MT 50 years ago

Vetatur Fumare
Vetatur Fumare
4 months ago
Reply to  Slow Joe Crow

I haven’t read Motor Trend in decades, but they were always the ones with the least editorial integrity.

Austin Vail
Austin Vail
4 months ago
Reply to  Salaryman

And the Chevy Vega when it first came out…

EVDesigner
EVDesigner
4 months ago

Hmm giant billion dollar corporation that said it was impossible to give union workers raises, suddenly has $10 billion to spend on stock buybacks? Looking forward to the GM bankruptcy sale in 10 years.

MATTinMKE
MATTinMKE
4 months ago

You’re not wrong Matt.

Also, crabby/moody Matt makes for good reading!

Andy Individual
Andy Individual
4 months ago

It seems like it’s still a bit too soon to name an EV “Blazer”.

MATTinMKE
MATTinMKE
4 months ago

What you did there…

I see it.

Data
Data
4 months ago

But once the battery fires start, whoa momma. The headlines write themselves.

The F--kshambolic Cretinoid Harvey Park
The F--kshambolic Cretinoid Harvey Park
4 months ago

“Sportcoat” doesn’t have quite the same ring to it.

Angel "the Cobra" Martin
Angel "the Cobra" Martin
4 months ago

GM is back on it’s bullshit with a pic of Rick Wagoner. That is some good Autopian.

Dan Bee
Dan Bee
4 months ago

Remember the 1989 spoof Car and Driver did called “MotoRooter.” It had a car of the year contest too. A Trabant competed, which to no surprise lost every category but one. The Trabant did win that category: amount of advertising. Which car got MotoRooter’s “Car of the Year?” The Trabant.

https://www.flickr.com/photos/autohistorian/35475349006

Geoffrey Reuther
Geoffrey Reuther
4 months ago

“Golden parachutes” and linking executive pay to stock price are two practices that can DIAF. Of course, suggesting that they be illegal will get you called a commie pinko, so…

Unfortunately, GM is indeed going full GM.

  • Says they can’t afford increased labor costs, so allows a pretty lengthy strike.
  • Almost immediately after settling strike, gives away $10bn in buybacks and dividends.
  • Stock price increases. Take a wild stab in the dark as to what that means for exec pay.
  • …?
  • Profit, I guess…
Vetatur Fumare
Vetatur Fumare
4 months ago

My whole worldview shifted as a youngster when one of the cooks at Red Lobster explained why we were open for lunch seven days a week (not a money maker): increased turnover increased stock value increased executive stock option values.

Hoonicus
Hoonicus
4 months ago

Since you brought up markets, and yesterday’s passing of Charlie Munger, thought appropriate to post a link to 44 best quotes.

On learning”Without the method of learning, you’re like a one-legged man in an ass-kicking contest. It’s just not going to work very well.” — 2021 Daily Journal Annual Meeting
https://finance.yahoo.com/news/memorable-quotes-from-berkshire-hathaways-charlie-munger-225308303.html

Manwich Sandwich
Manwich Sandwich
4 months ago

 Am I wrong about the SUV of the Year thing?”

Nope.

“Am I wrong about GM?”

Nope.

EmotionalSupportBMW
EmotionalSupportBMW
4 months ago

Since the unfortunate passing of Haramabe (Rest in power sweet prince). This place has felt increasingly like one just giant grift. It’s like the big money pumps don’t stop push fake dollar bills between influencers. What even is the economy anymore NFT schemes, and price gouging children via Takis? Do these cooperations produce anything that isn’t an overpriced piece of shit? From literal cradle to literal grave, we are at mercy of the Shareholders, blessed be their name; in stock dividends may they gain.

The F--kshambolic Cretinoid Harvey Park
The F--kshambolic Cretinoid Harvey Park
4 months ago

Peace be unto Harambe

Duke of Kent
Duke of Kent
4 months ago

Am I confusing them with a different outlet or haven’t Motor Trend’s awards always been a sort of “pay to play” thing? (Looking it up, it seems “JD Power” is a bigger offender, but the types of awards are similar.)

I’ll pay attention to what Consumer Reports has to say. I’m not as influenced by the other media outlets.

Drew
Drew
4 months ago
Reply to  Duke of Kent

I feel like Motor Trend follows the second word of its name a little too literally. I don’t think they are as much a pay to play as they are always picking whatever is the newest/trendiest thing. Is there a brand new model? Definitely on the shortlist for best blank of the year. Is there a new powertrain and/or a really significant redesign? Shortlist it! They aren’t as concerned with driving dynamics, build quality, or the like.

They actually pretty openly state what they are about when they judge the cars: design advancement, engineering (which they use to mean clever and novel solutions and new tech), efficiency, safety, value (measured against the same market segment), and “performance of intended function.” That last one is important, because it means an appliance car is held to a very different standard than a car made with driving engagement in mind. Quality isn’t actually on the list, nor is projected longevity.

JunkerDave
JunkerDave
4 months ago
Reply to  Duke of Kent

Exactly. Consumer Reports screws up sometimes, but at least they do it on their own dime, not because they got bribed.

The F--kshambolic Cretinoid Harvey Park
The F--kshambolic Cretinoid Harvey Park
4 months ago
Reply to  JunkerDave

Audi and Suzuki would like a word

Vetatur Fumare
Vetatur Fumare
4 months ago
Reply to  JunkerDave

I believe that Consumer Reports states what they think; my problem is that my parameters are not the same as theirs. I want a Samurai, dammit, or a responsive little four-door hatchback.

Adam EmmKay8 GTI
Adam EmmKay8 GTI
4 months ago
Reply to  Duke of Kent

Motor Trends previous cars of the year:
2000 Lincoln LS – I had one, a 2001 V8 with sport package model. It was great. Great handling car without harsh suspension! How come nobody in 23 years can do suspension that make the car handle great and be comfortable?
After LS Inifinty G35 had Car Of The Year award and it was also a good car.

At least these two were handsome, practical, good driving cars

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