Posted on 11/28/2018 8:28:43 AM PST by C19fan
When General Motors announced it was cutting up to 14,000 jobs and idling five automotive plants, it justified the massive cuts by citing long-term savings. The cuts would free up $6 billion in cash, for a net savings of $4.5 billion in cash by 2020.
The move will "make General Motors more agile, resilient and profitable" while the economy's still revving, CEO Mary Barra told investors Monday. Wall Street seemed to believe her, with GM's stock rising nearly 5 percent and one analyst on the call congratulating her "on getting in front of the curve here."
But GM hasn't exactly been tightfisted in recent years. The company has spent $10.6 billion since 2015 buying back its own shares, according to filings with the Securities and Exchange Commission. Stock buybacks do nothing for a company's productive capacity. But because buybacks reduce the number of shares on the market and thus make a stock more valuable, they can be popular with many investors as well as senior executives who are paid largely in stock.
(Excerpt) Read more at cbsnews.com ...
Busted! By their Leftist buddies at CBS to boot!
They can use the 5.5 billion as a down payment on the 11 billion they stole from the tax payers during the obungo administration
And Trump should use that 5.5 billion to build the wall
problem solved
There are rumors that Obama and his close allies lobbied GM CEO Mary Barra personally over the closures. If this is true, then the Democrats may have just lost the support of the UAW—ouch!
Totally agree! They skipped with $11B of OUR money.
FGM
Dream on.
Both sides will deny and obfuscate. The UAW will be in the RAT camp for the rest of our lives.
Not with 14,000 jobs lost for what amounts to specious reasons.
Maximizing the value of the stock is what a company is supposed to do. Even if that means offshoring to China to reduce costs.
It is government trade policy that needs to adjust to keep the jobs here, not individual companies.
Tariff incoming vehicles and their parts. And make the tariffs permanent. The market and companies need to know the tariffs aren’t going away the next time Trump has dinner with the Chinese.
Only then will they plan to build in the US.
Maximizing the value of the stock is what a company is supposed to do. Even if that means offshoring to China to reduce costs.
It is government trade policy that needs to adjust to keep the jobs here, not individual companies.
Tariff incoming vehicles and their parts. And make the tariffs permanent. The market and companies need to know the tariffs aren’t going away the next time Trump has dinner with the Chinese.
Only then will they plan to build in the US.
All they have to do is make cars that people want to buy...................
This ignores the fact that GM pays a quarterly dividend of $0.38 per share.
Buying back that stock means less money going out in dividends.
Anybody have a figure on the actual production loss $$ of the Volt?
so the $11B of taxpaper money was used to buy back stock to enrich the corporate heavies?
Well. On the one hand, the company is supposed to operate in the interest of the shareholders. On the other hand, they aren’t supposed to steal from the government to benefit the shareholders... and that’s what a buy-back, over and above normal dividend policy, looks like when the government of we, the people, holds the bag for the 11.2 billion dollar cost of the bailout.
Or, is there some doctrine of “let bygones be bygones” that I’m missing here?
EXACTLY how many jobs were lost when Obama/GM shut down dealerships all over the country?
Many were in rural areas, making it harder for people to get maintenance & other dealer items done timely.
The new GM cars are built with SEALED dipsticks for Oil & Transmission fluids. I never heard of anything so stupid. I live in N Nevada-—in a state- along with many other Western states where everything is miles apart. If something doesn’t sound right, and you try to check the transmission or oil, it VOIDS YOUR WARRANTY !!!!
Neighbor bought a new GM vehicle maybe 3 years ago. When I would hear him driving past my gate, the sound of his car just wasn’t right. I finally caught him & told him about it. He drove into my gate & I told him to open the hood & I would check his transmission fluid.
He was half-panicked. OH NO!! IF that seal is broken, The Warranty is voided!!!! What the Hell? Nothing here is less than 25t + miles or more apart.
I told him to drive directly to the dealer-—right then & see what was making the trans sound like it was having trouble shifting....
A week later, he drove in & thanked me.
Apparently, to ‘save weight’ in transport from the factory, there is MINIMAL fluid in the radiator—trans fluid—engine oil & even rear end fluid.
It is up to the dealer to top off everything before the car is sold & given to the customer.
His car had NOT been topped off. He got them to ‘extend his warranty’, but I told him he needed to get it in writing-—for the life of the car.
Meanwhile-—neither he or I could check the dipstick !!!
I have a 1976 Chevy 1 ton dually truck & a 1979 Buick station wagon. Truck has 348,000 miles on the chassis & Buick has 24,000 miles. Owned truck 32 + years-—Buick 37 + years.
I can check & refill fluids as I wish.
On this ‘warranty policy ‘ alone, I will NOT buy a new vehicle.
Economic illiteracy on full-display at See-B.S. News! One (stock buy-back) has nothing to do with the other (eliminating production of vehicles not meeting profit targets).
Suppose GM is making 100 different vehicle models. Then suppose 95 of them make acceptable profits, while 5 of them don’t. GM then acts to stop production of the 5 sub-par models. Isn’t this what corporations are supposed to do?
Only after you have some profit, and positive cash-flow, can you consider buying back stock. Doing so reduces the amount aggregate amount of dividend payments being made, and further improves profit and cash-flow. It also makes the aggregate profits spread-out over fewer shares, increasing the earnings-per-share held by its investors. Afterall, increasing shareholder value is their fiduciary duty.
So, all of that said, could they have accomplished all (or nearly all) of the same without shuttering American factories and laying off American workers? That’s the big question.
It shouldn’t have taken Trump beating them over the head with this message for them to make them realize they should have taken a long, hard look at deferring to America-first. The fact that they didn’t already anticipate a reaction and have a counter-response at the ready, tells me they DIDN’T give it a serious look. And, with the US subsidizing them still, it’s management malpractice for them not to have done so, and not to have had preliminary discussions with the administration about their plans.
I should probably know this, but didn’t we (the US Gov’t) buy stock of GM with the $11b? If so, how much do we still hold and is it worth more now than when we put in the cash? Is the US receiving dividend payments?
Automotive production levels are directly tied to UAW contracts.
The UAW proposes and the auto maker decides if they can make enough cars to justify the contract.
Not SELL enough cars...just make them.
This is why I’m driving a 2016 Scion iM (neé Toyota Corolla iM hatchback). I can easily check all the fluids and unlike most everyone else, Toyota still sells quite a lot of sedans and hatchbacks. Indeed, the upcoming 2020 Corolla sedan (coming in March 2019) will be a hot seller, most because there’s almost no competition!
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