GM to avoid fight with shareholder
...General Motors announced a $5 billion stock buyback Monday, a move that will end a potential battle with a group of shareholders about how the automaker uses its cash.
Shares of GM (GM) rose more than 2% in premarket trading following the news. The stock has rebounded sharply from the worst of last year's recall crisis and is now near its 52-week high.
GM also reiterated its plans to increase its quarterly dividend. The company made that announcement in February. GM shareholders will receive about $5 billion in dividends through the end of 2016.
As a result of GM's move, shareholder Harry Wilson, a former hedge fund manager who helped GM restructure during its bankruptcy a few years ago, said he would no longer seek a board seat at the company.
Read more at: http://money.cnn.com/2015/03/09/investing/gm-buyback-stock/index.htmlThe company said that it plans to make sure it always has $20 billion in cash to weather any future downturns in the auto business and added that it did not think any of the credit rating agencies would change their outlook for GM"s debt.
The decision may ease some pressure on GM and Barra, whose first year as CEO was marked by turmoil related to faulty ignition switches in models dating back to the late 1990s and early 2000s.
Those faulty switches have been determined to be responsible for at least 57 deaths, according to the most recent figures from Kenneth Feinberg, a victim compensation expert hired by GM to evaluate legal claims tied to the recalls.