Page 24 - ARUBA TODAY

Wednesday 29 March 2017 BUSINESS
A24

General Motors rejects investor plan for 2 stock classes

stock. The New York-based at the company,” he said. past seven months, includ-
hedge fund intends to sub- But GM said in a statement ing a meeting between
mit the non-binding plan at Tuesday that the proposal the hedge fund and GM’s
the GM annual sharehold- creates “unacceptable board. The Detroit auto-
ers’ meeting later this year, risks” and is not in the best maker said it consulted
where it will also nominate interests of shareholders. with ratings agencies and
four candidates for GM’s Among the risks are the po- conducted a review with
board. tential loss of GM’s invest- three investment banks.
Einhorn said Tuesday on ment grade credit rating, Shares of GM rose just un-
CNBC that GM is only pay- unknown market demand der 3 percent to $35.72 in
ing out a quarter of its earn- for the new securities that afternoon trading Tuesday.
ings, which is unusual for a could depress prices, and Two years ago, GM avoid-
high-yielding stock. Some corporate governance ed a proxy fight with annual
investors, he said, care only challenges that would investors by starting its stock
about the dividends, while come from having two buyback program. Since
This photo shows the General Motors logo at the company’s others care only about the classes of stock with com- then, GM has increased its
world headquarters in Detroit. General Motors says it has reject- company’s earnings. The peting objectives. earnings — profit reached
ed a proposal from investor David Einhorn to split its stock into proposal would give those Einhorn, however, said $9.4 billion last year — and
two classes. The company says the plan from Einhorn’s Green- who buy the stock for the GM’s contention that a paid out more in dividends
light Capital investment firm would eliminate the dividend on dividend what they want, change would endanger and stock repurchases. The
existing common stock and create a new dividend-focused and let other investors GM’s credit rating a red company promised to re-
security.
(AP Photo/Paul Sancya) get capital appreciation herring, contending that turn about $7 billion in cash
based on earnings and ratings agencies don’t nor- to shareholders this year,
stock buybacks. mally care about whether bringing total cash returns
TOM KRISHER two classes. The plan would pay the there are two classes of in dividends and buybacks
AP Auto Writer The plan from Einhorn’s same money to the same stock. Greenlight owns 0.88 to about $25 billion since
DETROIT (AP) — General Greenlight Capital hedge people, giving everyone percent of gm shares. 2012. GM now pays a divi-
Motors has rejected a pro- fund would create one what they want, he said. “It GM said its management dend of 38 cents per share,
posal from investor David dividend-paying stock and doesn’t change anything has spoken with Greenlight with an annual yield of 4.24
Einhorn to split its stock into one “capital allocation” else about what’s going on numerous times during the percent.q

Ford investing $1.2B in 3 Michigan plants, adding 130 jobs

DEE-ANN DURBIN Co. is investing $1.2 billion where it plans to add 130 JOBS! JOBS! JOBS!,” Trump pany told the White House
AP Auto Writer in three Michigan facilities, jobs. tweeted hours ahead of about the investments
DETROIT (AP) — Ford Motor including an engine plant President Donald Trump, the announcement. Tuesday morning. Hinrichs
who has pressured auto- The investments were in the said it’s not unusual for the
makers to invest more and works well before Trump company to reach out to
create jobs in the U.S., ap- took office, however. Ford state and national political
plauded the move Tues- announced plans to up- leaders before such an an-
day in an early morning grade some of its Michigan nouncement.
tweet. plants in November 2015 Hinrichs said Tuesday’s an-
“Big announcement by as part of a new contract nouncement was timed
Ford today. Major invest- with the United Auto Work- to a state meeting where
ment to be made in three ers union. officials approved nearly
Michigan plants. Car com- Ford Americas President $31 million in grants and
panies coming back to U.S. Joe Hinrichs said the com- 15-year tax exemptions
for Ford. Ford will spend
$850 million to upgrade the
Michigan Assembly Plant
next year to build the Ford
Ranger midsize pickup
and Ford Bronco SUV. Ford
plans to build the Ranger
starting at the end of 2018
and the Bronco starting in
2020.The suburban Detroit
plant currently makes small
cars, which are moving to
a plant in Mexico. Trump
has needled Ford and
other automakers in the
past about plans to move
small car production to
Mexico. Amid slowing sales
of smaller vehicles, Ford
did scrap plans for a brand
new plant in Mexico, but
will continue to build small
cars at an existing facility
there.q