There is no more flummoxing company than General Motors. On most days I’m pretty sure there is no better collection of engineers anywhere in the world than at GM. And yet GM is not the most successful car company in the world. What’s going on here?

Here’s a fun game: name the companies that were first to market with a daily-drivable-ish production electric car, a production turbocharged car, a touch-screen dash in a production car, and airbags? It’s a trick question because the answer is GM (EV-1), GM, GM, GM, and yet the company, to varying degrees, didn’t pursue those technologies until other people proved them to be popular.

And now comes the news that GM is back to handing out dividends to investors. Give me a break.

Oh, also speaking of giving me a break, I somehow missed that MotorTrend named the Blazer EV the SUV of the Year? What?

And then we’re gonna talk about the Nissan Leaf and a Jeep recall. I’m in a bit of a mood this morning and I’m now going to vent my spleen at the Lord so prepare thyselves.

GM Announces Boosted Dividend And $10 Billion Stock Buyback

Do you remember when GM as a company was clearly on the verge of collapse and it kept handing out dividends until freaking May of 2008 when the world was already on fire? Pepperidge Farms remembers.

For those of you who don’t follow the stock market, a dividend is basically when a company hands out a portion of its profits to shareholders. This often happens on a quarterly basis, and it’s not intrinsically a good or a bad thing. Some companies are in a stable position and aren’t in a situation where large investments will necessarily yield more value and therefore will pass money back to investors. Many companies don’t hand out dividends because those companies see a need for more investment. Tesla is one of those companies. Tesla doesn’t pay dividends.

And then there are companies that fall into the trap of doing share buybacks and handing out dividends to constantly boost their share prices when they should really be trying to improve their companies. Pre-Banktrucpy GM was famously one of these companies, though it’s not the only example. There’s also been Washington Mutual, Barnes & Noble, Kodak and many others.

So, it was a huge disappointment to see GM announcing a $10 billion accelerated share repurchase and that the company is increasing its dividends at the end of the year by 33% to 12 cents per share. There’s a whole letter from GM CEO Mary Barra explaining how, with the UAW strike settled and a clearer understanding of profits this year, the company can hand out some money. Here’s the highlight:

Now, with clarity on our labor costs and production back on track, we are returning to our capital allocation framework by repurchasing $10 billion of common stock through an accelerated share repurchase program, raising our common stock dividend by 33% starting in 2024 and reinstating our 2023 earnings guidance.

Cool, but what about all the stuff that’s not working?

Although I am disappointed with our Ultium-based EV production in 2023 due to difficulties with battery module assembly, we have made substantial improvements both to the process and to the organization responsible for this work. In 2024, we expect significantly higher Ultium EV production and significantly improved EV margins. We are also addressing challenges at Cruise.

What Cruise has accomplished in the eight years since we acquired the company is remarkable. Our priority now is to focus the team on safety, transparency and accountability. We must rebuild trust with regulators at the local, state and federal levels, as well as with the first responders and the communities in which Cruise will operate.

I mean, what do I know, right? I’m just some schlub with a computer who doesn’t have to sit in a C-Suite and deal with angry investors. I actually worked in the Mortgage Back Securities industry on the back-end in 2005 and 2006 and saw that the whole thing made no sense and left the finance world in disgust, but I wasn’t smart enough to try to buy insurance like the people in “The Big Short” and make myself rich. If you can’t do, teach, and if you can’t teach I guess blog.

The world is a complex place and Barra deserves credit for winding her way through difficult times and restoring some faith in the company. But this is a huge step backward in my mind (and I‘m not the only one who thinks this is weird). Yes, the company’s truck and SUV business is very profitable and I also think their new EVs look very good, but if I were a GM shareholder I’d want them to invest as much as possible in hybrids and fixing their Ultium production. It’s nice that GM will be profitable this year and that the strike is only going to cost about a billion dollars, but in what universe does GM not need every cent to survive a future with Chinese automakers expanding in Mexico and Tesla showing no signs of slowing down?

This is cynical, but I suppose I should point out that this will almost certainly boost GM’s stock price (it has so far this morning) and, in 2022, Mary Barra was paid $2.1 million in salary and $14.6 million in stock options. Do with that information what you will.

Capitalism, when it’s done well, is ultimately a balancing act between the present and the future. What are you willing to do to make today survivable and how much will that harm your ability to survive in the future?

I’m not in GM’s C-Suite. I have no special insight or sources into what’s going on in the minds of executives and it’s possible that there’s enough pressure from the Board of Directors and from shareholders to provide immediate value and it’s just what the COO and CEO and executives have decided needs to be done to keep the stock price high enough to live another day.

Maybe. But I’ve seen this before and, while GM is not in 2007-era bad shape, tomorrow isn’t promised to anyone, and the company better hope that Ultium and Cruise are all buttoned up and there are enough resources to keep the company alive through all the unpredictability of the future.

The Blazer Is The MotorTrend SUV Of The Year?

Here’s another line from that Mary Barra letter that caught me off guard:

As the EV market grows, we will have an exceptional, purpose-built electric vehicle line-up that is designed to win with customers. These include the Chevrolet Blazer EV, just named 2024 MotorTrend SUV of the Year, milestone vehicles like the Chevrolet Silverado EV, Chevrolet Equinox EV and the Cadillac OPTIQ, and a host of others in a wide variety of segments.

Excuse me? That underlined bit was a surprise to me.

The Chevy Blazer EV is the SUV of the Year? Technically, you can buy a Blazer EV. And maybe you should! I haven’t driven it and, after this episode of The Morning Dump, maybe I’ll never get the chance, but MotorTrend thinks it’s very good and they are excellent at evaluating cars.

Here’s what they said:

Much more than an enlarged Bolt EV, the Blazer EV is far more viable for the needs of individuals and families everywhere. It’s not just because it establishes Chevrolet, once again, as a serious force in the EV space. Nor can its excellence be pinned on novel powertrain solutions or slick design details. It’s how these factors combine with overall product excellence that makes the Blazer EV our SUV of the Year.

I’m sorry, I can’t with this. The car looks really good and I wouldn’t be surprised if it was a great car. I was just driving around last night with my buddy in his newly purchased used Bolt I convinced him to buy and it’s an awesome product.

But the amount of credit given to GM here is way too high. Here’s a bit that really bugs me:

General Motors has already introduced a few vehicles on the Ultium platform,” Detroit editor Alisa Priddle said, “but this is the one where it applied lessons learned from the others—and even the Bolt EV—and created a winner.”

There are EV Blazers for sale and I am sure that, eventually, GM will get production rolling and it’s even smart of the company to make sure the cars will work before they sell them. But they haven’t yet and I don’t see a lot of mentions of Ultium delays in this write-up. I mean, look at the GM-supplied caption from that photo above. Spring 2023!

Even if you grant that Blazer EV sales are happening and that GM is being smart and prudent here, the main issue with electric car adoption is affordability and another $50-60,000 EV doesn’t solve this issue. I’m looking forward to the Equinox EV and I’m hoping the company can deliver that car at a reasonable price.

Of MotorTrend‘s criteria for judging these things, value is only one pillar of evaluation, but a Model Y starts at like $44k and the Blazer costs a lot more. Also, it’s MotorTrend‘s award and it’s ultimately meaningless so who cares? I do, obviously. [Ed Note: Automakers do, too. When I was at Chrysler, I recall the brands making a big deal of such awards. -DT]. So MotorTrend is the real winner here.

Am I being too cynical here? I don’t know. But until GM can show they can actively make a lot of these things at scale and can bring down the price I’m a little confused by this call.

The Nissan Leaf Is Going To Reportedly Be A Crossover/SUV

Apparently, Nissan’s Chill-Out concept was a preview of the new Nissan Leaf and, yeah, sure.

From Automotive News:

Nissan will tap into European tastes for crossovers with the next-generation Leaf in a styling shift it hopes will significantly boost demand.

The Leaf compact EV is the first of three high-riding, battery-electric cars that Nissan will build for European markets at its factory in Sunderland, England. It will be followed by an electric replacement for the Juke small EV, expected in 2025, and the next Qashqai, which is likely due around 2027.

The next Leaf will launch at the end of next year, a source at Nissan told Automotive News Europe. Nissan has not revealed an official launch date.

Make The Leaf Great Again! Or, maybe, Make The Leaf Great For The First Time.

Jeep Recalls 32,000 Wrangler 4Xes Over Fire Risk

The Jeep Wrangler 4xe is the best-selling plug-in hybrid in America and that’s funny to me. It is. I’m not going to explain it, but I say it with love. I’m a 4xe fan.

Bad news from Consumer Reports if you’re an owner of one, however:

In a statement, the automaker says: “The vehicles may be driven. However, the company is advising owners to refrain from recharging these hybrid vehicles, and to park them away from structures and other vehicles, until they are remedied.”

Stellantis has identified eight fires with parked vehicles. In six of those cases, the Wrangler 4xe was connected to electric chargers.

The fix is a software update, and only 1 percent of the recalled group is estimated to have the problem.

So, that’s not ideal, but the good news I guess is that I’ve seen a ton of 4xes and I’ve never actually seen one plugged in.

The Big Question

Am I wrong? Am I wrong about the SUV of the Year thing? Am I wrong about GM? I could be wrong. It happens.