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GM encouraged by global recovery, will prefer long-term strategy: CEO

GM also is not looking for "a short-term pop" as it relates to its corporate structure, CEO Barra added, when asked about a possible spinoff of the automaker's electric vehicle assets

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General Motors | Automobile | automobile industry

Reuters  |  DETROIT 

General Motors Chief Executive Officer Mary Barra. Photo: Reuters
General Motors Chief Executive Officer Mary Barra. Photo: Reuters

By Ben Klayman

DETROIT (Reuters) - Co Chief Executive Mary Barra said on Monday global vehicle demand was recovering from declines caused by the coronavirus pandemic, but added she would not take any short-term actions to boost GM's stock at the expense of its long-term strategy.

"We are encouraged about the recovery we are seeing in most of our markets," Barra said at an RBC conference, citing strong U.S. industry demand in August and a continued rebound in China.

Labor officials last week said that U.S. consumer prices rose solidly in August, with the cost of used vehicles accelerating by the most in 51 years as Americans likely shunned public transportation because of fears of contracting COVID-19.

GM also is not looking for "a short-term pop" as it relates to its corporate structure, Barra added, when asked about a possible spinoff of the automaker's electric vehicle assets.

"As I've said many times, we will always do what's in the best interest of our shareholders over the long term, not necessarily for a short-term pop," she said.

Some analysts and GM shareholders have pushed GM to consider a spinoff of all or some of its EV assets into a separate company that would be valued at headier levels like Tesla Inc and other newly public EV automakers.

During a July earnings conference call, Barra said nothing was off the table when it came to maximizing the value of its EV assets and there was no impediment to a possible spinoff.

On Monday, Barra did not promise a spinoff, but talked up GM's EV technology. "We want to avoid any scenario where those competencies are compromised or there is a distraction from speed to market," she said.

Last week, GM said it would join forces with electric vehicle startup Nikola Corp to build electric pickup trucks and hydrogen fuel cell commercial trucks.

Nikola subsequently came under attack from a short seller that accused the startup of being a "fraud." Nikola called the short seller's report a "hit job" and threatened legal action.

Barra on Monday referred questions about the matter to Nikola, but said the deal made sense for GM by validating its technology and giving it scale to cut costs.

 

(Reporting by Ben Klayman, Editing by Franklin Paul and Tom Brown)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Tue, September 15 2020. 09:51 IST
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