Shortly after hearing the news that GM is shuttering plants and laying off 15,000 workers, we learned that over the past three years they spent $14 billion as part of a stock buyback program. During that same period, the stock dropped $10. I don’t know if this $14 billion was borrowed or came from revenues, but couldn’t that money have been invested in R&D, or rehabilitating their brand, or retooling existing plants, or designing new cars that people actually want to buy — things that set the company up to be more competitive in the long-term?
A lot of the big American companies are so focused on pleasing the investor class in the short-term at the expense of the company’s future. All the car companies are struggling with lower sales right now, especially with interest rates rising, but it seems that GM is always a proverbial loser in the auto market.