WASHINGTON (AP) — General Motors has approved another $6 billion share repurchase as the Detroit automaker adds to its 2024 momentum.
The Tuesday announcement follows a $10 billion share buyback authorization in November of last year. Shares in the Detroit automaker rose 1.4% to $48.21 Tuesday while broader markets were mixed. GM's shares are up 34% since the beginning of 2024.
GM, which announced in April that it was moving its Detroit headquarters to a new downtown office building next year, also raised its dividend to 12 cents per share from the previous 9 cents per share.
Also Tuesday, GM said it's investing another $850 million into the troubled Cruise autonomous vehicle unit. The money will “help with operational cash needs" at Cruise until the company finds the right long-term capital strategy that could include partnerships and funding from outside of GM.
Cruise suspended operations in October when one of its Chevrolet Bolt autonomous electric vehicles dragged a San Francisco pedestrian roughly 20 feet (6 meters) to the curb at roughly 7 miles per hour (11 kilometers per hour), after the pedestrian was hit by a human-driven vehicle.
But the California Public Utilities Commission, which in August granted Cruise a permit to operate an around-the-clock fleet of computer-driven taxis throughout San Francisco, alleged Cruise then covered up details of the crash for more than two weeks. The incident resulted in Cruise’s license to operate its driverless fleet in California being suspended by regulators and triggered a purge of its leadership.
At Deutsche Bank's Global Automotive Conference Tuesday, GM Chief Financial Officer Paul Jacobson said the company has reduced its full-year electric vehicle production forecast to between 200,000 to 250,000. Previously the company had predicted 200,000 to 300,000.
Industry analysts had expected EVs to account for 10% of U.S. vehicle sales this year, but it's now trending toward about 8%, Jacobson said.
This year has proven to be a bit of a renaissance for General Motors, whose shares sunk to around $26 late last year. Excluding the pandemic swoon in spring of 2020, GM shares hadn't fallen that low in a decade.
GM turned a first-quarter profit of $2.97 billion, up 25% over the same period a year earlier, boosted by strong deliveries of pickup trucks and other higher-profit vehicles. Though U.S. vehicle sales dipped slightly early this year, the company has emphasized its focus on profitability and managing expenses. It easily beat Wall Street's sales and profit targets and raised its guidance for 2024.
GM's resurgence comes as rival U.S. automakers seem to be treading water, even as new car sales remain healthy. Ford's shares are up less than 1% this year and the company's first-quarter net income fell 24% from a year ago.
Stellantis reported a first-quarter sales decline and its shares are down almost 7% this year.
Elon Musk's Tesla reported a sharp first-quarter sales decline amid increased competition and a slowdown in electric vehicle sales. Sales fell 9% in the period, the first year-over-year quarterly sales decline in nearly four years. The drop in sales came even as the company rolled out numerous and generous price cuts to some models. Tesla shares have lost nearly a third of their value this year.
