GM is one of America’s biggest corporate moochers. The company would have failed in 2008 had the Obama Administration not bailed out the company and it has since received tens of billions more in taxpayer grants, subsidies, and other sweetheart goodies. GM’s failed electrification attempts have been heavily subsidized by U.S. taxpayers, and they take a $7,500 hit on almost every EV Barra manages to sell, including the vehicles she manufactures in Mexico...
Given that EVs are the future and Barra has failed so miserably trying to manufacture and sell them, GM’s stock understandably fared poorly. Compounding Barra’s dismal EV performance is the Cruise driverless taxi business debacle she’s also responsible for. Under Barra, GM doesn’t appear to have much of a future beyond selling high margin, gas guzzling trucks and SUVs. If GM’s stock remained in the gutter, it would be increasingly difficult for the media to promote its narrative that Barra is one of America’s best CEOs, as Fortune editor Alyson Shontell and others maintain.
GM’s stock until last week was down 14% for the year, while the S&P 500 was up 19%. To goose the stock price and mitigate the damage of her failed leadership, Barra gleefully announced her $10 billion stock buyback.
Stock buybacks boost share prices, at least in the short term, because they reduce the number of shares outstanding. Barra’s ruse worked as planned: GM’s stock immediately rose about 10%. At this writing, GM was trading at about $33, roughly the price of the company’s initial public offering price in 2014, but still down 17% from what GM was trading at when Barra took over two years later...
With rivals doubling down on their EV investments, one should reasonably expect that Barra would be hoarding her shekels and trying to remain competitive. Instead, she’s cut back on GM’s planned EV expenditures and earmarked $10 billion to bribe investors not to clamor for her removal. Barra also said she hopes to build even more profitable gas guzzling trucks and SUVs. Hard as I’ve tried, I have yet to find even one environmentalist voicing outrage...
Defenders of Barra’s obscene $58 million in compensation these past two years and the more than $200 million she’s received in her nine years on the job are always quick to point out that much of her largesse is stock options. Barra will be among the biggest beneficiaries of her $10 billion stock buyback...
