GM to Hike Dividend, Buy Back $10 Billion of Slumping Stock

GM to Hike Dividend, Buy Back $10 Billion of Slumping Stock
https://finance.yahoo.com/news/gm-hike-dividend-buy-back-113318579.html

General Motors Co. will boost its dividend by 33% and repurchase $10 billion of shares — its biggest-ever buyback plan — sparking renewed interest among investors in a stock that has slumped this year as the company’s technology investments have faltered.

There's one big reason that a big corporation like General Motors buys back stock - it bolsters the value of the stock that it's upper management is compensated in. After this announcement, be on the lookout for Mary, Mark and others to sell a monumental amount of stock! CEOs of corporations and banks have been doing this lately. It points to a deep, deep recession. They see the trends and they know what's coming.

When GM lays of people and shuts down plants to save $2 billion dollars, they position themselves as having great intentions (assume goodness right?). It's for the sake of the company right? WRONG. It's all about pooling resources for those stock buybacks.

Also note that GM tried to play hardball with the UAW while acting like it was in dire straights. They strategically waited to make this announcement AFTER the UAW contract was signed. Quietly, on a Wednesday morning, $10 billion comes out of nowhere to buy back stock. Keep all this in mind when GM starts laying people off again "to reserve cash". It's never about the health of the company. It's always about rewarding those upper managers.
PS Also be aware when they reduce your bonus and restart layoffs and buyouts that they will cite "challenges" like the UAW strike and the chip shortage as cutting into profits. Remember that $10 billion dollars - an incredible amount of money - was spent to bolster their stock compensation and subsequent selling. If they were smart they would have held on to that $10 billion to navigate troubling times ahead like Ford did before the last recession.

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“EV profit margins may have looked less bleak”
Big 3 EV’s were never profitable!
Now the UAW is targeting Tesla.
Uh-oh.

Ironically, the new UAW contract is forcing investment away from current EV development faster, which saves the company money sooner. Otherwise EV profit margins may have looked less bleak. Now new innovation and technology must be developed for EV’s to be profitable. Necessity is the mother of invention.

In terms of cost savings into 2024, GM is probably going to look to cut up to another 2.5 to 3 billion. They originally stated 1.5 billion in 2024 after meeting the so-called 2 billion in 2023 from the original VSP, but they have a new Sith Lord in HR, and it sounds like that figure just went up astronomically.

Don’t be surprised if some of the UAW costs get smoothed in as well( the execs have to get their bonuses this year as well).

Remember, “Assume Goodness……”……..so depressing.

“ Did they just win EVs so now they can give all the money they make on pickups and SUVs to the shareholders?”

They didn’t give any money to shareholders. They bought $10 billion in shares of their own stock to boost the value. That way when Mary and Mark sell the shares they were compensated with, they get more money.

Wait till Reuss starts shoveling money into Formula One racing!! ( Google Andretti Autosports)....

I thought they didn't have money to give the UAW because they needed it for maintaining the company's leadership in EVs so they can save the world. Did they just win EVs so now they can give all the money they make on pickups and SUVs to the shareholders?

If GM is buying back stock, that means they don't see a point to investing in future technology. For example, EVs.

So did we meet the 2B in cost savings from earlier in the year? Are all UAW expenses accounted for? Does Cruise have all the money it needs to right itself? Has the weakening consumer demand been addressed? I'm so confused!

@ywj+1pPTsz1r

It will likely mean a reduction in force (and layoffs are one way to achieve that)

But how they choose to achieve that is TBD. To avoid bad press following the new UAW agreement and with it being an elecrion year, in all likelihood it will be more buyouts, not backfilling positions when people quit/retire and performance-based terminations.

"So that means layoffs, right?"

It could mean a lot of things.
*Could be spending less on infrastructure costs, aka overhead by consolidating people into buildings - something they are already doing. We are spread out for miles in buildings that need to be supplied and maintained. How empty is it when you go into the office? It only makes sense. Plus, better "collaboration", right? LOL
*Could be cuts in advertising budgets. Realigning/re-balancing ad deployment based on metrics.
*Could be cuts in personnel, sure. Who's contributing to the bottom line? Who's not? How has the organization changed? What can be outsourced, consolidated or obsoleted?
*Could be cuts in programs. How has the market changed? Does the current product portfolio plan align? Perhaps cut a few programs and put more resources into a category ki-ler.
*Could be cuts in overseas operations, duplicate product brands, alternative/experimental vehicles, stock dividends, or donations.

One thing that will never be cut in the budget: upper management roles and compensation. There are obviously shifts in the market that are of great concern that I won't go over here. But needless to say, big changes are definitely coming.

"Assume goodness on the part of others. Do what you say you’re going to do. And always remember that if you win without integrity, you really haven’t won." ~MB

Remember, Mary has sold untold millions in shares of General Motors stock while shoveling all of GM's profits into stock buybacks. Then she started an employee stock purchase program -WITH NO EMPLOYEE DISCOUNT (almost unheard of)- to boost the value of the stocks even higher. It's an endless grift of boosting stocks, getting compensated with stocks and then selling those stocks. That's how winning with integrity is done in the modern era.

They could have given the 10 billion back to shareholders as a dividend.

GM CEO Mary Barra in a statement said the company is finalizing a budget for next year that will "fully offset the incremental costs of our new labor agreements."

So that means layoffs, right?

As for Cruise, they lost almost 2 billion this year just through the 3rd quarter.

When will they just dissolve it?

Thread regarding General Motors layoffs

GM to Hike Dividend, Buy Back $10 Billion of Slumping Stock

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