General Motors CEO on Hot Seat

There’s an old saying that its not what have you done, but what have you done for me lately and nobody is feeling that more than current General Motors CEO, Mary Barra, who may be on the hot seat if she can’t get the numbers to move.

The current General Motors’ CEO has done an admirable  job over her tenure at the USA’s biggest automotive manufacturer.  Under her guidance the company has been the number one selling domestic auto brand for the last five years, but had hit some headwinds lately and has seen its stock drop to six percent below the price of GM stock post bankruptcy.

But even the best can’t seem to crack the code for moving Auto stock prices and while most believe that Barra has done a good job the numbers speak for themselves.  The stock did a big run up, peaking in 2017 at around $46 dollars per share, but since then has dropped over thirty three percent – to provide perspective, the Standard and Poor five hundred index increased almost 8% over the same period.

The big elephant(s) in the room are the activist shareholders who are lining up to hit the company with a third massive action against the company.  Which isn’t really catching anyone by surprise based on what the word on the street is.  The current CEO inherited a hot mess and over her time she’s managed a massive stock buy back, sold off money draining operations, dealt with a major recall and has steered the company to a more technologically advanced automotive manufacturer.
The challenge for the executive team is that most can’t see the forest from the trees on this on as General Motors’ Truck and Sport Utility Vehicle divisions are profitable as are their Chinese operations not to mention that’s its market cap is sitting at just under  $50 Billion dollars.  The other hard thing is that the company is protected by any government agency and doesn’t have a ‘family’ dynasty within its ranks, which makes it an easy target for those looking to hit the company.  Some options include splitting the stock to help unlock more value, but the harder route will be to try and turn the sentiment of the market.  Stay tuned for a bumpy last quarter.