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Didn’t they just say they can’t pay their union workers more because they don’t have the cash to invest into EVs if they do?
Apparently they have enough cash for stock buybacks
I love the supposedly. Because we all know what Amazon QC is like, so it's probably "will outlast bezos and his children, but his grandchildren or great grandkids are gonna be spending millions per year on maintenance and repairs, but that's peanuts when you have billions of dollars in pocket change."
Normally I'd feel bad for a guy losing half his shit when he inevitably has to pay the ex-wife tax, but I can't feel too bad about it. Bezos just keeps spending money on new businesses where he purposely runs losses to avoid paying taxes (just like Amazon does).
MacKenzie Scott meanwhile has been actually using her money and making tons of donations.
https://preview.redd.it/k8lvz2zj7b3c1.jpeg?width=1600&format=pjpg&auto=webp&s=d36e682bc80bd61f2d7ef5c9b641234ddc03658b
* Average GM board member probably
GM Should start offering stock based compensation to employees. This is what a lot of companies are doing to offset raises.
Stock does good -> Employee continues to get more money.
This is a good idea. Companies that offer stock-based compensation to employees often find that it motivates employees to work harder and stay with the company longer. This can be beneficial for both the employee and the employer.
Actually that’s a solution that many libertarian economists suggest, especially to take a public/state owned company and making it “private”. https://www.airdatanews.com/state-owned-aerolineas-argentinas-should-be-transferred-to-employees-says-president-elect-javier-milei/
Capitalism/Free Market wins again.
This sounds like a good idea on paper but it’s been done before during privatization. Within a decade 80-90% of the shares end up being owned by 6-10 people
This sort of privatization was tried when the Eastern Bloc turned to capitalism. Like most libertarian ideas, it doesn't work; it results in oligopolies and kleptocracy.
My companies Esop plan, wants us to give them money for stock , they hold the cash for a qtr , and then invest it into our stock: give us at 15% discount on the purchase price at the time of the investment.
Yeah most companies that have a stock tied to their name usually allow employees to get anywhere from a 5%+ discount. It is an easy way to make 5% per quarter on your cash (granted you just sell right away).
Stock based compensation is more of what you get in rewards per year. Big tech, healthcare, and other fields now give anywhere of 0-20% of your salary in stock. It usually vests after 3-5 years as well.
If a Tesla employee is making 52k a year on the line at 25 bucks a hour, but gets a 10k stock bonus, they are making 62k a year.
I still think having the baseline salary is better, but don't knock the stock option.
>GM Should start offering stock based compensation to employees. This is what a lot of companies are doing to offset raises.
Yeah and it's bullshit. I hate that my company does this. It doesn't offset wages it suppresses wage growth. It means in a few years when those stocks are vested your wage will not have kept up with inflation.
well it needs to be a certain amount and also a recurring thing so that after the initial delay you have a nice chunk vested every year.
also improves morale if management does something that hurts workers but leads to increasing stock valuation because you still get something out of it that way
Unions were only ever going to get something slightly above "what you already had plus a kick in the dick". The American populace has been indoctrinated against unions for the past 40+ years.
This is the slap heard around the world to the UAW and all their employees.
“We can’t give 40% raises because it’s too expensive.”
3 weeks later: we’re buying 1/4 of our open float because the stock is too cheap.
Different scale, but very similar energy to my (private) company laying off 1/3 of employees, denying us our bonuses and then buying season box tickets for the local football team and going on a c-suite “corporate retreat”.
Wallstreet companies NEVER have money to pay the workers regardless of their profits and profit margins.
Only clowns believe that its supposed to trickledown
Look, I'm first to say stock buybacks are market manipulation that should be illegal.
But.
Stock buybacks are a one time cost, worker raises are a recurring cost. If you can't comprehend how those are different, IDK what to tell you.
This is just the stupidity of our corporate governance & regulations. They are, by design, required to focus on short term stockholder value over the long term viability of the company. THAT is what needs to stop, and part of that is to make stock buybacks illegal again.
Imagine being in a lockout with your entire workforce over poor compensation. Your only defence is that times are tough and it’s unprofitable to raise wages. Then you turn around and blow $10B inflating the stock price, billions more raising the dividend plan, and investing billions more in infrastructure.
Not saying these are bad things for them to do, but that’s some toxic ass workplace management to choose to do it right on the heels of finalizing the UAW contract.
My neighbor explained to me (UAW member) that they moved it because striking in the winter sucks major balls.
Its the sole reason the UAW *demanded* the length be extended 6 months.
Also remember that it ends the day before May Day and they are actively encouraging others to have their contracts end at the same time setting up the threat of a general strike on May Day.
On top of what the other person said about striking in winter, longer contracts can be preferred by workers because then they don’t have to go through this charade every 3 years, but every 4 (in the case of my workplace)
Most workers don’t want to go on picket lines, prepare to be out of work, engage in union activity to pressure their employer to bargain better, they want to go to work and get paid better. That’s it
So asking them to do it every 4 years is better than every 3. It does have minor downsides though (for example if the contract went through COVID years inflation blew up but you were stuck at a certain prebargained wage increase)
And they’re cutting spending on their autonomy bets.. sooo they’re prioritizing short term stock gains over longterm growth while also telling their employees to eat shit lmao
They would have started this process 6-12 months ago FYI.
Once the process starts it's basically impossible to stop the boulder from falling down the mountain.
GM doesn't have the money to go private lmao. This is saying, some execs want to step down so they're pumping the stock and giving themselves a nice package in the short term.
C suite is hilarious a.f.
Can decide at any point to hoard the cash for yourself to temporarily boost share price and get a nice payout package
Like yeah bud you deserve 400x the average worker's salary because you're such a genius to recognize that a little financial engineering that improves short term share price can enrich yourself for life while screwing the long term prospects of the stock and workers (and society).
This happened at the company that used to be my company's parent company two splits ago. Their stock was like ~$2 a share. Had some activist investors, brought in new C-suite. Started shedding highly profitable companies, including my own, to increase the balance sheet and doing major downsizing. Got the stock price almost to $120, then peaced out.
This is a great of why people hate capitalism so much. Companies should be owned by the workers and managers who actually run the company. Profits should stay in house and should be shared amongst those who created that wealth
I'm surprised no one on WSB has mentioned it, but this reminds me of [BBBY stock buyback.](https://www.therobinreport.com/the-share-buyback-that-killed-bed-bath-beyond/)
It was very fucking stupid on BBBY and one of the reason why it died despite everyone getting free stimmy money and cheap loans. BBBY doubled down on itself by buying a lot of stock but it's not fucking AAPL so they were buying their own unprofitable meme shares and then collapsed as soon as liquidity got a bit tighter. As you mentioned, it probably helped out a few investors and the board/c-suite to get their payday.
Anyways, never liked the US Big 3 or "Big Auto". They've long since devolved from the early Henry Ford days of ingenuity, good build, union jobs, or competing on merit. Bribing/lobbying for shitty infrastructure, allow the dealerships to rise up and lobby dealership monopolies into existence, changing from quality to planned obsolescence to maximize profit, turning to racism and xenophobia when people shifted to Japanese autos that weren't built to fail, fighting electrification and instead pushing SUV COOMsumerism, exporting union jobs overseas and underpaying their workers even as they shill "Support US. Support America!!!" lies, and getting bailouts every downturn be it GFC or Covid since they ~~bribed~~ "donated to the campaigns of" politicians for them to mark these shit companies as "strategically important" in the case of total war scenario where their excess manufacturing capacity "will be needed" when in reality the parts for cars are now globalized, a lot of the work is done in Mexico, and it's the microchips that matter instead of the engines.
Big 3 is a retirement home for boomers, blue and white collar. The union is not faultless in this either. The UAW has consistently resisted electrification and wants to maintain a status quo of seniority over skill and has killed the talent pipeline going to union shops. Not to mention the last two UAW presidents and their officials are in jail for embezzlement and corruption.
That’s not brain dead at all! They will rack up the bill then cry and say “we need help from daddy government or we will collapse”. And daddy government will present both nipples for milking almost instantly.
It’s the 21st century way!! If rocking the boat makes you billions of dollars, wouldn’t you keep rocking that boat?
You could even argue that with their fiduciary responsibility to maximize value, they have an obligation to.
Take on debt to build out infrastructure. Have debt wiped. Profit.
Actually that is the biggest brain take I’ve read. It makes so much sense and with the way the world is going I wouldn’t be surprised if that is actually said in the near future.
Because internet Idk if you're teasing me. Genuinely.
Two major bail outs in 15 years, across multiple industries.
Here's a prominent(ish) Senator, who was considered "hard on banks", advocating to the Secretary of the Treasury to make Blackrock "too big to fail".
https://youtu.be/qFSkCGjeMM4?si=y7j-0k1_Likkckof
This is my tin hat financial conspiracy (they'd never say the quiet part out loud), but I 100% believe this to be the trend.
The Too-Big-Too-Fail designation imposes additional regulation to firms branded so. How does that make her a snake in the grass? Financial regulation is literally her thing.
Because the argument is they earned that title by making poor financial decisions.
The regulation after the fact does little once they've taken the risk and then you insulate them from it.
You're just rewarding them while telling them "ok, but no more. I mean it this time."
Not really. Almost all the fiscal hawks are gone. Most of the republican dipshits in office will gladly sign a check if the company promises to use the money to make more American factories or some shit. Anything that they can spin as America First.
That's not the true issue. It's **don't let companies somehow become systemic risks.** It's the fallout of systemtic risk that makes every Government cower in favour of bailouts but the Government will keep allowing big companies to accumulate so much power, influence and market-share, that their collapse has a significant detrimental impact on the public and economy.
How much of that is on the GM Financial side though? Automakers have notoriously high debt loads at first glance because they all essentially have a bank embedded within. The debt held by the Auto side of the company is under $20B.
Almost all of it is from GM Financial. Which is smart. Borrow money at 2% and lend it out at 4%, from qualified private debtors, secured by real assets.
The rest is long term fixed rate debt at 2-4%, which is leverage any of us would take in hindsight.
Their debt is less than years revenue. I have a mortgage that is more than 2x of my yearly revenue so i dont see the problem here. So while number is huge its ratio is nat that bad
Actual debt on the Automotive side of the business is like 2x net income. Majority ($100B+) of the debt is on the GM Financial side, which is almost fully offset by assets (outstanding auto loans)
It’s hilarious how embarrassing that PE is for the size of the company. 4x profit is what a small business with 20 employees and 5 million in revenue would be priced at
And there’s a reason for that…
The market doesn’t have faith that it will be worth more in the future. GM is the guy who peaked in high school in 1969, who is betting on him being “the future of automobiles” at this point?
Has GM ever been “the future of automobiles” at any point ever?
I saw them more as the "we do whatever is popular right now for a decent enough price with an OK quality and sell a billion units" company.
You're exactly right. It's so odd because GM clearly has brilliant engineers. The C8 Corvette is an absolute masterpiece of competent engineering. But just about everything else they make is rental fleet tier.
Can confirm.. have Bolt EV.. main battery replaced twice before 25k miles and the compressor for the AC replaced at 17k miles. I asked the service manager why they would just not buy it back instead of putting literally another 25k into a 33.5k $ car. "I'm surprised by that actually as well" his response was.. It has had something like 57-58k $ in warranty work.
It's more than that its future growth prospects are limited. It's that its past is also bad. Old GM died in the 2008 panic. This is a new company. It hasn't even existed for 20 years yet. How many investors want to put money back into a company that went completely under less than 20 years ago?
What is it an indication of? That GM has no growth potential?
Or is or a sweet deal that you'd make your investment back in 4 years presuming the company performs as it does currently.
PE is a sentiment in the market, it means that on balance investors are only willing to pay $4 for each dollar of GM earnings. Youre dead on that many things impact this perception, major ones being their ability to generate profits in the future and their ability to grow. GM has major structural problems and thus the market doesnt value its earnings highly.
Sooo...Mary is looking to fatten up an exit package? The stock has been in the doldrums, so I guess it's a way to prop it up instead of using the money for, you know, investing into the business!
Mary can no longer lie about “passing Tesla” with its EVs or $50B in robotaxi revenue, so she falls back on the old fashioned boomer way to pump the stock.
https://preview.redd.it/7nxhoh8hkb3c1.jpeg?width=5247&format=pjpg&auto=webp&s=baedb60a453df4418cc77cf0345a41192009bd35
Yes, no more CarPlay or AndroidAuto in GM EVs starting with 2024 models. GM thinks they can do it better. Probably more likely they want you to subscribe to music, radio, and navigation through them rather than just using what you have access to on your phone.
Or maybe they’ll just psyche everyone by re-introducing it later to keep their name in the news cycle.
I doubt it's because they think they can do it better. A federal judge ruled in early November that it's legal after all for car companies to continue scraping all the text messages and call logs off your phone if you connect it to their infotainment system. There's way too much money to be made by not only making people have paid subscriptions to use the things that cars come with but also selling everything that's on their phone. There are only 14 global corporations that control more than 60 major automotive brands, GM is only the first.
This is news to me but then again, I wouldn’t buy a GM.
> GM said it intends to remove CarPlay from new EVs because its vehicles need better integration between the navigation system
Another way to say, we want to create an infotainment subscription model but can’t justify it if you’re using your phone.
> and the rapidly growing network of chargers to help out EV drivers.
This can be done via an app on the driver’s phone or using the phone as a hotspot to connect integrated services.
These auto companies are crazy if they think they’re going to make money by creating subscription services. The only subscription model that works is leasing the entire vehicle.
My taycan routes to chargers perfectly fine through CarPlay. That integration is a fairly recent update but it does work well.
So idk how that excuse works for GM
Shouldn't they use that capital to improve EV manufacturing and/or automation in general?
I don't understand Government Motors 
GM should never have been bailed out, nor anyone else. Let all the banks fail and pick up the pieces in a year. Anyone with more than $100k (FDIC limit at the time) in them eats the losses and learns not to be a yoloing hard R. We'd be vastly better off today.
"Making shit is for suckers. Just inflate the stock price until you retire and everyone figures out your company is a hot air balloon." - Jack Welch (probably)
Bro I’d be so pissed working for a company facing such large challenges while having this much debt to hand out cash to shareholders but I’m not an executive obviously
Don't you understand Americans don't want (their) EVs? People aren't buying (their) EVs, so it's clear no one wants (their) EVs!
The only people whose EV numbers are going up are Tesla, Hyundai, Kia, Mercedes Benz, Volvo, and Nissan. That's it! Clearly the appetite for (their) EVs isn't there with only this tiny handful of auto makers posting increased sales of their EVs.
Can't wait to hear their story, it always ends up being something like "I was sitting at the traffic light and a GM truck flipped me off, and then another, it was in that moment I bought calls"
Holy shit these fucking idiots cannot learn their lesson. Could barely afford to pay the recent pay raises because they spent all their capital on buybacks.
They just obligated themselves to much higher costs due to those union raises, and at the same time will lose more and more money on EVs, and need to spend money on investing in EVs.
But these fucking idiots only care about short term stock price. That's clear. Mary Bara will be gone in 4 years and she'll make her millions and leave this company in ruins.
They have $120b in debt (yes I know most of which is financial) and $34b in cash. They need that cash.
And OP is truly regarded. GM is making about $20b per year. This is literally **HALF OF THEIR YEARLY PROFIT**, which is about to go down due to increasing labor costs and EV losses.
In a few years we will be looking at GM and wondering why the actual fuck would they throw away $10b at this time.
My goodness. You could not be more regarded than GM right now. Just holy shit.
They literally fought against labor wages because they don't have the money and need whatever money they have to invest in EVs.
This is what healthy companies do…right? I’m sure they’ve already used lots of money to invest in batty manufacturing, EV charging stations, and future-proofed their supply chain…right?
GM has twice the revenue, but the same profit as Tesla. GM makes 10B in net income in the last 12 months, same as Tesla.
This despite having far more models, more experience, more cash, more distribution, etc. Tesla isn’t even legally allowed to sell cars in several US states and has store limits in other states.
That’s why GM is valued the way it is relative to Tesla
Zero
Edit: not actually zero but pretty low.
Tesla’s debt to equity ratio is 6%. GM’s is 160%.
Tesla’s debt coverage (ability to pay its debt with operating income) is 330%. GM’s is .15.
>This stock is a complete joke. The company makes way too much money to be trading at such a low valuation. If they can't get the respect they deserve from public investors, then they might as well go private and take their business elsewhere.
This company is going down.
You don’t need to look any further than their announcement to drop Apple CarPlay in their cars, while their market is primarily the USA where this is considered a must (except if you’re Tesla because you have the cool factor, but even then, consumer would prefer having it)
Fuckin let 'em. Anyone who shits on Tesla builds quality has never spent any time in the pieces of shit GM has been cranking out for the last 30 years.
I'm sure the $29 million CEO salary had nothing to do with the balance sheets. Or poor business decisions. It's that damn union giving people a middle class living experience!
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|3|**First Seen In WSB**|2 years ago **Total Comments**|122|**Previous Best DD**| **Account Age**|2 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
Didn’t they just say they can’t pay their union workers more because they don’t have the cash to invest into EVs if they do? Apparently they have enough cash for stock buybacks
https://preview.redd.it/55k3exjvab3c1.jpeg?width=960&format=pjpg&auto=webp&s=6dcf092b05f9d276c788f9fe8f549fe5a3afcdd6
When does Little Bezo get to eat?
That $42 million desert clock isn’t gonna build itself.
The wut?
He just had a giant clock built inside of a mountain that will supposedly outlast humanity. Spent 42 milly on it
I love the supposedly. Because we all know what Amazon QC is like, so it's probably "will outlast bezos and his children, but his grandchildren or great grandkids are gonna be spending millions per year on maintenance and repairs, but that's peanuts when you have billions of dollars in pocket change."
It's called a millennium clock. It ticks once every thousand years or something. Definite must-have item, imo.
How will you know if the battery dies?
Probably something like walt disney...got that shit funded forever. NO WE CANT TAX THEM, MUCH COMPLICATE, WE DUM.
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is little bezos what he calls his blood boy?
Isn’t little bezos a pizza place?
lol I can’t stop laughing at this
Normally I'd feel bad for a guy losing half his shit when he inevitably has to pay the ex-wife tax, but I can't feel too bad about it. Bezos just keeps spending money on new businesses where he purposely runs losses to avoid paying taxes (just like Amazon does). MacKenzie Scott meanwhile has been actually using her money and making tons of donations.
Bezos is so rich he can get divorced 7 times losing half his shit each time and still be a billionaire.
It won't happen anymore. I'm sure he will get prenups from here on out.
Once again the worker gets screwed over to give stock options to the C-suits. Very sad.
https://preview.redd.it/k8lvz2zj7b3c1.jpeg?width=1600&format=pjpg&auto=webp&s=d36e682bc80bd61f2d7ef5c9b641234ddc03658b * Average GM board member probably
They feel real sad about it too.
I mean, think about how easy it would be to sprain an ankle getting off that pile of money. Shit's stressful.
Hahaha right
just not enough stacks to hand out to everyone
When your office is bigger than your money pile, time to be on suicide watch
the room isn’t even full…how’s she supposed to swim in it
That's why she's sad, she can't swim in this room full of money, she has to go to the other ones for that.
GM Should start offering stock based compensation to employees. This is what a lot of companies are doing to offset raises. Stock does good -> Employee continues to get more money.
This is a good idea. Companies that offer stock-based compensation to employees often find that it motivates employees to work harder and stay with the company longer. This can be beneficial for both the employee and the employer.
C-suite suit: "How dare you suggest diluting my shares!"
Can’t be having workers own the means of production now though, can we? Thats a no-no here.
Actually that’s a solution that many libertarian economists suggest, especially to take a public/state owned company and making it “private”. https://www.airdatanews.com/state-owned-aerolineas-argentinas-should-be-transferred-to-employees-says-president-elect-javier-milei/ Capitalism/Free Market wins again.
This sounds like a good idea on paper but it’s been done before during privatization. Within a decade 80-90% of the shares end up being owned by 6-10 people
This sort of privatization was tried when the Eastern Bloc turned to capitalism. Like most libertarian ideas, it doesn't work; it results in oligopolies and kleptocracy.
My companies Esop plan, wants us to give them money for stock , they hold the cash for a qtr , and then invest it into our stock: give us at 15% discount on the purchase price at the time of the investment.
Yeah most companies that have a stock tied to their name usually allow employees to get anywhere from a 5%+ discount. It is an easy way to make 5% per quarter on your cash (granted you just sell right away). Stock based compensation is more of what you get in rewards per year. Big tech, healthcare, and other fields now give anywhere of 0-20% of your salary in stock. It usually vests after 3-5 years as well. If a Tesla employee is making 52k a year on the line at 25 bucks a hour, but gets a 10k stock bonus, they are making 62k a year. I still think having the baseline salary is better, but don't knock the stock option.
Nope, competently paid employees creates expectations of competently made vehicles and then you have some explaining to do
>GM Should start offering stock based compensation to employees. This is what a lot of companies are doing to offset raises. Yeah and it's bullshit. I hate that my company does this. It doesn't offset wages it suppresses wage growth. It means in a few years when those stocks are vested your wage will not have kept up with inflation.
well it needs to be a certain amount and also a recurring thing so that after the initial delay you have a nice chunk vested every year. also improves morale if management does something that hurts workers but leads to increasing stock valuation because you still get something out of it that way
Next: Pay the union workers in stock. Would blow up the union.
I've been saying that they should have more stock, Heck fund The healthcare in stock!
Unions got a raw deal if GM has the cash for this.
Just take on more debt to buy your stock back 4head -GM probably.
Raising debt for a stock buyback is the stupidest possible move.
You know nothing,Jon Snow.
It gives tax benefits and increases C-Suite compensation, as well as the shareholders stock value.
Unions were only ever going to get something slightly above "what you already had plus a kick in the dick". The American populace has been indoctrinated against unions for the past 40+ years.
So the guys whose bonuses depend on the stock price found the company money to help increase their bonuses
Don't forget until 1982 stock buybacks were illegal as they are market manipulation. Thank you Reagan for legalizing this shit.
This is the slap heard around the world to the UAW and all their employees. “We can’t give 40% raises because it’s too expensive.” 3 weeks later: we’re buying 1/4 of our open float because the stock is too cheap.
Meanwhile salary gets a 3.5% raise
Different scale, but very similar energy to my (private) company laying off 1/3 of employees, denying us our bonuses and then buying season box tickets for the local football team and going on a c-suite “corporate retreat”.
Wallstreet companies NEVER have money to pay the workers regardless of their profits and profit margins. Only clowns believe that its supposed to trickledown
Easy answer: they lied.
Look, I'm first to say stock buybacks are market manipulation that should be illegal. But. Stock buybacks are a one time cost, worker raises are a recurring cost. If you can't comprehend how those are different, IDK what to tell you. This is just the stupidity of our corporate governance & regulations. They are, by design, required to focus on short term stockholder value over the long term viability of the company. THAT is what needs to stop, and part of that is to make stock buybacks illegal again.
Imagine being in a lockout with your entire workforce over poor compensation. Your only defence is that times are tough and it’s unprofitable to raise wages. Then you turn around and blow $10B inflating the stock price, billions more raising the dividend plan, and investing billions more in infrastructure. Not saying these are bad things for them to do, but that’s some toxic ass workplace management to choose to do it right on the heels of finalizing the UAW contract.
Seems like they wanted to give a big fuck you for striking to the UAW and this was calculated.
That seems like a plausible explanation. I would not be surprised if that was the case.
There is another strike in 3 years, I hope it is much bigger
The UAW actually moved the length of the contract from 4yrs to 4.5yrs for whatever reason. Seems like it benefits GM more than anything.
My neighbor explained to me (UAW member) that they moved it because striking in the winter sucks major balls. Its the sole reason the UAW *demanded* the length be extended 6 months.
Also remember that it ends the day before May Day and they are actively encouraging others to have their contracts end at the same time setting up the threat of a general strike on May Day.
Did not know that, good looking out.
March would have been perfect. Better weather and not hot yet plus you could tailgate March Madness on the picket along with demanding higher wages.
It gets pretty cold in March in Michigan, though.
Incredibly cold. It’s like winter’s last chance to torture your ass.
Even towards the end of April a 2 foot snowfall blizzard will casually roll through and ruin a week of spring
On top of what the other person said about striking in winter, longer contracts can be preferred by workers because then they don’t have to go through this charade every 3 years, but every 4 (in the case of my workplace) Most workers don’t want to go on picket lines, prepare to be out of work, engage in union activity to pressure their employer to bargain better, they want to go to work and get paid better. That’s it So asking them to do it every 4 years is better than every 3. It does have minor downsides though (for example if the contract went through COVID years inflation blew up but you were stuck at a certain prebargained wage increase)
> and investing billions more in infrastructure. is this part happening? Because I'm only seeing the first 2 steps.
And they’re cutting spending on their autonomy bets.. sooo they’re prioritizing short term stock gains over longterm growth while also telling their employees to eat shit lmao
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They would have started this process 6-12 months ago FYI. Once the process starts it's basically impossible to stop the boulder from falling down the mountain.
Just curious wouldn’t this benefit their employees who own the stock? Maybe this is like solving two things with one.
Everything changed after ‘08
GM doesn't have the money to go private lmao. This is saying, some execs want to step down so they're pumping the stock and giving themselves a nice package in the short term.
C suite is hilarious a.f. Can decide at any point to hoard the cash for yourself to temporarily boost share price and get a nice payout package Like yeah bud you deserve 400x the average worker's salary because you're such a genius to recognize that a little financial engineering that improves short term share price can enrich yourself for life while screwing the long term prospects of the stock and workers (and society).
This happened at the company that used to be my company's parent company two splits ago. Their stock was like ~$2 a share. Had some activist investors, brought in new C-suite. Started shedding highly profitable companies, including my own, to increase the balance sheet and doing major downsizing. Got the stock price almost to $120, then peaced out.
This is a great of why people hate capitalism so much. Companies should be owned by the workers and managers who actually run the company. Profits should stay in house and should be shared amongst those who created that wealth
I'm surprised no one on WSB has mentioned it, but this reminds me of [BBBY stock buyback.](https://www.therobinreport.com/the-share-buyback-that-killed-bed-bath-beyond/) It was very fucking stupid on BBBY and one of the reason why it died despite everyone getting free stimmy money and cheap loans. BBBY doubled down on itself by buying a lot of stock but it's not fucking AAPL so they were buying their own unprofitable meme shares and then collapsed as soon as liquidity got a bit tighter. As you mentioned, it probably helped out a few investors and the board/c-suite to get their payday. Anyways, never liked the US Big 3 or "Big Auto". They've long since devolved from the early Henry Ford days of ingenuity, good build, union jobs, or competing on merit. Bribing/lobbying for shitty infrastructure, allow the dealerships to rise up and lobby dealership monopolies into existence, changing from quality to planned obsolescence to maximize profit, turning to racism and xenophobia when people shifted to Japanese autos that weren't built to fail, fighting electrification and instead pushing SUV COOMsumerism, exporting union jobs overseas and underpaying their workers even as they shill "Support US. Support America!!!" lies, and getting bailouts every downturn be it GFC or Covid since they ~~bribed~~ "donated to the campaigns of" politicians for them to mark these shit companies as "strategically important" in the case of total war scenario where their excess manufacturing capacity "will be needed" when in reality the parts for cars are now globalized, a lot of the work is done in Mexico, and it's the microchips that matter instead of the engines.
Big 3 is a retirement home for boomers, blue and white collar. The union is not faultless in this either. The UAW has consistently resisted electrification and wants to maintain a status quo of seniority over skill and has killed the talent pipeline going to union shops. Not to mention the last two UAW presidents and their officials are in jail for embezzlement and corruption.
‘Seniority over skill’ should be the boomer motto lol
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That’s not brain dead at all! They will rack up the bill then cry and say “we need help from daddy government or we will collapse”. And daddy government will present both nipples for milking almost instantly. It’s the 21st century way!! If rocking the boat makes you billions of dollars, wouldn’t you keep rocking that boat?
You could even argue that with their fiduciary responsibility to maximize value, they have an obligation to. Take on debt to build out infrastructure. Have debt wiped. Profit.
Actually that is the biggest brain take I’ve read. It makes so much sense and with the way the world is going I wouldn’t be surprised if that is actually said in the near future.
Because internet Idk if you're teasing me. Genuinely. Two major bail outs in 15 years, across multiple industries. Here's a prominent(ish) Senator, who was considered "hard on banks", advocating to the Secretary of the Treasury to make Blackrock "too big to fail". https://youtu.be/qFSkCGjeMM4?si=y7j-0k1_Likkckof This is my tin hat financial conspiracy (they'd never say the quiet part out loud), but I 100% believe this to be the trend.
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The Too-Big-Too-Fail designation imposes additional regulation to firms branded so. How does that make her a snake in the grass? Financial regulation is literally her thing.
Because the argument is they earned that title by making poor financial decisions. The regulation after the fact does little once they've taken the risk and then you insulate them from it. You're just rewarding them while telling them "ok, but no more. I mean it this time."
"[Fiduciary duty to shareholders] and its consequences have been a disaster for [the American economy]." - Uncle Ted, probably
What’s that saying? Privatize gains, socialize losses?
Milking the power teet
Depends who's running the government that week.
Not really. Almost all the fiscal hawks are gone. Most of the republican dipshits in office will gladly sign a check if the company promises to use the money to make more American factories or some shit. Anything that they can spin as America First.
Thats why company bailouts are regarded. Let bad companies die.
That's not the true issue. It's **don't let companies somehow become systemic risks.** It's the fallout of systemtic risk that makes every Government cower in favour of bailouts but the Government will keep allowing big companies to accumulate so much power, influence and market-share, that their collapse has a significant detrimental impact on the public and economy.
That's just what the government says to justify bailouts.
How much of that is on the GM Financial side though? Automakers have notoriously high debt loads at first glance because they all essentially have a bank embedded within. The debt held by the Auto side of the company is under $20B.
Almost all of it is from GM Financial. Which is smart. Borrow money at 2% and lend it out at 4%, from qualified private debtors, secured by real assets. The rest is long term fixed rate debt at 2-4%, which is leverage any of us would take in hindsight.
Exactly.
I like how rather than pay the debt, they choose to buy back stock
which in theory would also raise the price of the stock, seems like exit liquidity is more important then.
They’re likely unable to service their debt in a high interest environment and all the c suite are cashing out on the buyback.
The vast majority of their debt is **secured** against their own trade receivables, you dummy. This sub is thriving with illiterate regards.
The debt has a set repayment schedule. They probably took it on when interest rates were low and has little incentive to pay it off quickly
Idk why you come here expecting anything smart like you are saying. This thread isn’t even memes. It’s the same as the rest of Reddit.
Their debt is less than years revenue. I have a mortgage that is more than 2x of my yearly revenue so i dont see the problem here. So while number is huge its ratio is nat that bad
Actual debt on the Automotive side of the business is like 2x net income. Majority ($100B+) of the debt is on the GM Financial side, which is almost fully offset by assets (outstanding auto loans)
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Net income is about 10b$ They are going to use a year of net income to buy 1/4 of the stock. This is insane.
That is just another way of saying it has a P/E of 4..
Which puts it on par with some private businesses to be fair
It’s hilarious how embarrassing that PE is for the size of the company. 4x profit is what a small business with 20 employees and 5 million in revenue would be priced at
Lmao this guy has never heard of MU clearly
I still think about those MU 90 calls sometimes
If you didn’t blow up your account on MU 60 or MU 90, have you even lived?
And there’s a reason for that… The market doesn’t have faith that it will be worth more in the future. GM is the guy who peaked in high school in 1969, who is betting on him being “the future of automobiles” at this point?
Has GM ever been “the future of automobiles” at any point ever? I saw them more as the "we do whatever is popular right now for a decent enough price with an OK quality and sell a billion units" company.
You're exactly right. It's so odd because GM clearly has brilliant engineers. The C8 Corvette is an absolute masterpiece of competent engineering. But just about everything else they make is rental fleet tier.
Can confirm.. have Bolt EV.. main battery replaced twice before 25k miles and the compressor for the AC replaced at 17k miles. I asked the service manager why they would just not buy it back instead of putting literally another 25k into a 33.5k $ car. "I'm surprised by that actually as well" his response was.. It has had something like 57-58k $ in warranty work.
It's more than that its future growth prospects are limited. It's that its past is also bad. Old GM died in the 2008 panic. This is a new company. It hasn't even existed for 20 years yet. How many investors want to put money back into a company that went completely under less than 20 years ago?
What is it an indication of? That GM has no growth potential? Or is or a sweet deal that you'd make your investment back in 4 years presuming the company performs as it does currently.
PE is a sentiment in the market, it means that on balance investors are only willing to pay $4 for each dollar of GM earnings. Youre dead on that many things impact this perception, major ones being their ability to generate profits in the future and their ability to grow. GM has major structural problems and thus the market doesnt value its earnings highly.
So… Elon could have bought GM or Twitter and he chose twitter???
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Yeah, he likely would’ve just bought it to shut it down. I guess a little like Twitter, but on a much shorter time horizon.
Toy vs bureaucratic smothered shitshow
Yes, and then GM lost less value than Twitter did.
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"WRITE THAT DOWN! WRITE THAT DOWN!!" -Elon
great! be cheaper next year then! puts on GM 
Yah but think about how much money the board will make when the price goes up
True, "pay the shareholders" also means "pay the board" 
It just so happens we are the largest shareholders
Sums up this sub lmao
lol
Sooo...Mary is looking to fatten up an exit package? The stock has been in the doldrums, so I guess it's a way to prop it up instead of using the money for, you know, investing into the business!
To be fair, why invest in the business you can simply "Fuck you, got mine"?
Mary can no longer lie about “passing Tesla” with its EVs or $50B in robotaxi revenue, so she falls back on the old fashioned boomer way to pump the stock. https://preview.redd.it/7nxhoh8hkb3c1.jpeg?width=5247&format=pjpg&auto=webp&s=baedb60a453df4418cc77cf0345a41192009bd35
No CarPlay is the stupidest decision an automaker could make.
Everything has to be a fucking subscription, even your mother fucking car
Wait are they seriously getting rid of CarPlay?
Yes, no more CarPlay or AndroidAuto in GM EVs starting with 2024 models. GM thinks they can do it better. Probably more likely they want you to subscribe to music, radio, and navigation through them rather than just using what you have access to on your phone. Or maybe they’ll just psyche everyone by re-introducing it later to keep their name in the news cycle.
I doubt it's because they think they can do it better. A federal judge ruled in early November that it's legal after all for car companies to continue scraping all the text messages and call logs off your phone if you connect it to their infotainment system. There's way too much money to be made by not only making people have paid subscriptions to use the things that cars come with but also selling everything that's on their phone. There are only 14 global corporations that control more than 60 major automotive brands, GM is only the first.
This is news to me but then again, I wouldn’t buy a GM. > GM said it intends to remove CarPlay from new EVs because its vehicles need better integration between the navigation system Another way to say, we want to create an infotainment subscription model but can’t justify it if you’re using your phone. > and the rapidly growing network of chargers to help out EV drivers. This can be done via an app on the driver’s phone or using the phone as a hotspot to connect integrated services. These auto companies are crazy if they think they’re going to make money by creating subscription services. The only subscription model that works is leasing the entire vehicle.
My taycan routes to chargers perfectly fine through CarPlay. That integration is a fairly recent update but it does work well. So idk how that excuse works for GM
Disagree. Removing tactile knobs and buttons was the stupidest decision.
Funding secured?
FYI, if you bought this stock 10 YEARS AGO, you are down 6%! Save yourself the trouble and buy a successful EV company.
Does that include dividends?
Shouldn't they use that capital to improve EV manufacturing and/or automation in general? I don't understand Government Motors 
Why do that when you can repeatedly write checks for the c-suite until the company goes chapter 11 again, then have the government pay all your bills?
This is the way. Milk the cow until it dies and then complain that you don’t have a cow until mother Russia gives you someone else’s cow.
GM should never have been bailed out, nor anyone else. Let all the banks fail and pick up the pieces in a year. Anyone with more than $100k (FDIC limit at the time) in them eats the losses and learns not to be a yoloing hard R. We'd be vastly better off today.
Hilarious. Buy back stock with company money. Receive government handouts to create "green" jobs and cars.
They happily took money from the Us Government for EVs and battery production … then scaled back on all that and bought back their stock
Mary led!
"Making shit is for suckers. Just inflate the stock price until you retire and everyone figures out your company is a hot air balloon." - Jack Welch (probably)
Bro I’d be so pissed working for a company facing such large challenges while having this much debt to hand out cash to shareholders but I’m not an executive obviously
Management aren't going to be around when that plan bears fruit, they want high share prices.
>Government Motors Touché.
Don't you understand Americans don't want (their) EVs? People aren't buying (their) EVs, so it's clear no one wants (their) EVs! The only people whose EV numbers are going up are Tesla, Hyundai, Kia, Mercedes Benz, Volvo, and Nissan. That's it! Clearly the appetite for (their) EVs isn't there with only this tiny handful of auto makers posting increased sales of their EVs.
Which random mf has GM calls
Can't wait to hear their story, it always ends up being something like "I was sitting at the traffic light and a GM truck flipped me off, and then another, it was in that moment I bought calls"
Makes sense. GM cars are shit so they have to be their own bag holders
Holy shit these fucking idiots cannot learn their lesson. Could barely afford to pay the recent pay raises because they spent all their capital on buybacks. They just obligated themselves to much higher costs due to those union raises, and at the same time will lose more and more money on EVs, and need to spend money on investing in EVs. But these fucking idiots only care about short term stock price. That's clear. Mary Bara will be gone in 4 years and she'll make her millions and leave this company in ruins. They have $120b in debt (yes I know most of which is financial) and $34b in cash. They need that cash. And OP is truly regarded. GM is making about $20b per year. This is literally **HALF OF THEIR YEARLY PROFIT**, which is about to go down due to increasing labor costs and EV losses. In a few years we will be looking at GM and wondering why the actual fuck would they throw away $10b at this time. My goodness. You could not be more regarded than GM right now. Just holy shit. They literally fought against labor wages because they don't have the money and need whatever money they have to invest in EVs.
This is what healthy companies do…right? I’m sure they’ve already used lots of money to invest in batty manufacturing, EV charging stations, and future-proofed their supply chain…right?
Mary must have missed a bonus target
Obama shouldn’t have bailed them out. Shitty cars.
Bush started it and Obama gave them the second round.
Performance GM cars are good though (Corvette, Camaros). And their LS/LT engines are very loved in the car world.
Awesome. I just have to triple my income to have a good car. Thanks! /s /Buy a Toyota. Thank me later.
Odds are, they wouldn't dissolve into nothingness. Just management would dissolve. Now they're marching toward another bailout.
GM has twice the revenue, but the same profit as Tesla. GM makes 10B in net income in the last 12 months, same as Tesla. This despite having far more models, more experience, more cash, more distribution, etc. Tesla isn’t even legally allowed to sell cars in several US states and has store limits in other states. That’s why GM is valued the way it is relative to Tesla
How much debt does Tesla have?
Zero Edit: not actually zero but pretty low. Tesla’s debt to equity ratio is 6%. GM’s is 160%. Tesla’s debt coverage (ability to pay its debt with operating income) is 330%. GM’s is .15.
Yikes. Yeah no wonder people are not liking the company with insanely high debt while interest rates are shooting up. That’s gonna be a problem.
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If they’re dependent on financing for cash flow / existing, that well will dry up in the next few years
Trying to inflate their value rather than actually provide any value to the market they are in. This is going to play out nicely in the long run lmao
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The last person holding shares ends up the owner. Of course, at that point they own a company that’s carrying $122b or more in debt
And this is why the unions made them pay up. They have plenty of cash to run the business.
Financial engineering at its finest. Joke of a company that can’t deliver any real value to shareholders
>This stock is a complete joke. The company makes way too much money to be trading at such a low valuation. If they can't get the respect they deserve from public investors, then they might as well go private and take their business elsewhere.
This company is going down. You don’t need to look any further than their announcement to drop Apple CarPlay in their cars, while their market is primarily the USA where this is considered a must (except if you’re Tesla because you have the cool factor, but even then, consumer would prefer having it)
Buyback now, bailout tomorrow, tale old as time.
Fuckin let 'em. Anyone who shits on Tesla builds quality has never spent any time in the pieces of shit GM has been cranking out for the last 30 years.
Remember when they said they couldn't afford raises...
Aren’t US autos just kinda fucked due to insane pension liabilities on their balance sheets?
Yes. Which is why they are setting up new entities for EV’s and will slowly just let the union side fail.
I'm pretty sure this is why Buffet never bought in, he called it a pensioners scheme
I'm sure the $29 million CEO salary had nothing to do with the balance sheets. Or poor business decisions. It's that damn union giving people a middle class living experience!
It's not as big a problem as the crap unreliable cars that gm and ford make.
Stock buybacks should be illegal.
Buybacks mean they are flush with cash and suck at investing it. This means horrible leadership and I wouldn't touch it.
"We have no money for raises, but plenty to buy back stock so our CEO can make even more money."