By on February 11, 2015

Maeva Advisors LLC Founder and CEO Harry Wilson Interview

The man who helped General Motors restructure in 2009 now wants the automaker to buy back $8 billion in shares to help boost its value.

Bloomberg reports Harry J. Wilson is asking to not only for a seat on GM’s board, but for the automaker to also agree to said buyback in June, with execution to take place the following year. The move is meant to provide more value for its shareholders, who are frustrated with the automaker’s reluctance to spend some of the $25 billion it has to withstand another recession if necessary.

Wilson believes the automaker could part with $8 billion and still withstand an economic blow like the one that landed it in bankruptcy court six years prior, and is working with four investment funds that hold a total of 34.4 million shares to help make it so. Wilson was tapped by President Barack Obama to help with GM’s restructuring during said bankruptcy.

That said, GM may still be reluctant to spend that much money. Per Morningstar senior equity analyst David Whiston, the company has to be careful amid a weak industry outside of North America. GM also faces the spectre of a large fine paid to the U.S. Department of Justice due to the former’s handling of the February 2014 ignition switch recall, as well as building up its lending arm GM Financial to boost the automaker’s credit rating.

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38 Comments on “Wilson: $8B Stock Buyback Would Boost General Motors’ Value...”


  • avatar
    Conslaw

    Assuming GM has 8 billion in extra cash. there are a lot better uses for it than to buy out some whiny good-time-charlie investors. GM’s product cycles are still longer than average. With $8 billion you can re-engineer a major platform and have some left over for a refresh or two.

  • avatar
    jrmason

    “That said, GM may still be reluctant to spend that much money. ”

    Well, they’ve dedicated that and more to move production out of country, so I suppose it all depends on the “incentives”. With the administration in their back pocket I don’t think they’re too concerned with what the future may hold.

  • avatar
    Fred

    Judging by his track record with Yahoo I wouldn’t be eager to hook up with Mr Wilson.

  • avatar
    CJinSD

    And after Obama’s crony does his thing to fleece GM for his .1% backers, damaging GM’s prospects in the process, Obama can point to this action as another ‘failure of capitalism.’

    • 0 avatar
      Fred

      You do know Mr Wilson is a republican. Instead of blaming Obama for everything you should look into the history of the revolving door between Goldman Sachs and the Treasury.

      • 0 avatar
        Ron

        +1

      • 0 avatar
        APaGttH

        You and your facts, and your partisan politics – Obama is evil – why our esteemed CJ has even invoked Goodwin’s law on more than one occasion when it comes to Obama.

        • 0 avatar
          Lou_BC

          Does making comments about Obama’s Muslim roots count under Godwin’s law?

          • 0 avatar
            Fred

            I’ve never heard of this Godwin’s law, so I looked it up. I think he got it right, but I can’t vouch for it as I usually unsubscribe before it get’s that far.

          • 0 avatar
            CJinSD

            Obama just happened to know 60s far-left radical revolutionary William Ayers, whose father just happened to be Thomas Ayers, who just happened to be a close friend of Obama’s communist mentor Frank Marshall Davis, who just happened to work at the communist-sympathizing Chicago Defender with Vernon Jarrett, who just happened to later become the father-in-law of Iranian-born leftist Valerie Jarrett, who Obama just happened to choose as his closest White House advisor, and who just happened to have been CEO of Habitat Company, which just happened to manage public housing in Chicago, which just happened to get millions of dollars from the Illinois state legislature, and which just happened not to properly maintain the housing—which eventually just happened to require demolition.

            Valerie Jarrett also just happened to work for the city of Chicago, and just happened to hire Michelle LaVaughan Robinson (later Mrs. Obama), who just happened to have worked at the Sidley Austin law firm, where former fugitive from the FBI Bernardine Dohrn also just happened to work, and where Barack Obama just happened to get a summer job.

            Bernardine Dohrn just happened to be married to William Ayers, with whom shejust happened to have hidden from the FBI at a San Francisco marina, along with Donald Warden, who just happened to change his name to Khalid al-Mansour, and Warden/al-Mansour just happened to be a mentor of Black Panther Party founders Huey Newton and Bobby Seale and a close associate of Nation of Islam leader Louis Farrakhan, and al-Mansour just happened to be financial adviser to a Saudi Prince, who just happened to donate cash to Harvard, for which Obama just happenedto get a critical letter of recommendation from Percy Sutton, who just happened to have been the attorney for Malcolm X, who just happened to know Kenyan politician Tom Mboya, who just happenedto be a close friend of Barack Hussein Obama, Sr., who just happened to meet Malcolm X when he traveled to Kenya.

            Obama, Sr. just happened to have his education at the University of Hawaii paid for by the Laubach Literacy Institute, which just happened to have been supported by Elizabeth Mooney Kirk, whojust happened to be a friend of Malcolm X, who just happened to have been associated with the Nation of Islam, which was later headed by Louis Farrakhan, who just happens to live very close to Obama’s Chicago mansion, which also just happens to be located very close to the residence of William Ayers and Bernardine Dohrn, who just happen to have been occasional baby-sitters for Malia and Natasha Obama, whose parents just happened to have no concern exposing their daughters to bomb-making communists.

            After attending Occidental College and Columbia University, where he just happened to have foreign Muslim roommates, Obama moved to Chicago to work for the Industrial Areas Foundation, an organization that just happened to have been founded by Marxist and radical agitator Saul “the Red” Alinsky, author of Rules for Radicals, who just happened to be the topic of Hillary Rodham Clinton’s thesis at Wellesley College, and Obama’s $25,000 salary at IAF just happened to be funded by a grant from the Woods Fund, which was founded by the Woods family, whose Sahara Coal company just happened to provide coal to Commonwealth Edison, whose CEO just happened to be Thomas Ayers, whose son William Ayers just happened to serve on the board of the Woods Fund, along with Obama.

            Obama also worked on voter registration drives in Chicago in the 1980s and just happened to work with leftist political groups like the Democratic Socialists of America (DSA) and Socialist International (SI), through which Obama met Carl Davidson, who just happened to travel to Cuba during the Vietnam War to sabotage the U.S. war effort, and who just happened to be a former member of the SDS and a member of the Committees of Correspondence for Democracy and Socialism, which just happened to sponsor a 2002 anti-war rally at which Obama spoke, and which just happened to have been organized by Marilyn Katz, a former SDS activist and later public relations consultant who just happened to be a long-time friend of Obama’s political hatchet man, David Axelrod.

            Obama joined Trinity United Church of Christ (TUCC), whose pastor was Reverend Jeremiah Wright, a fiery orator who just happened to preach Marxism and Black Liberation Theology and who delivered anti-white, anti-Jew, and anti-American sermons, which Obama just happened never to hear because he just happened to miss church only on the days when Wright was at his “most enthusiastic,” and Obama just happened never to notice that Oprah Winfrey left the church because it was too radical, and just happened never to notice that the church gave the vile anti-Semitic Nation of Islam leader Louis Farrakhan a lifetime achievement award.

            Although no one had ever heard of him at the time, Obama just happened to receive an impossible-to-believe $125,000 advance to write a book about race relations, which he just happened to fail to write while using the cash to vacation in Bali with his wife Michelle, and despite his record of non-writing he just happened to receive a second advance, for $40,000, from another publisher, and he eventually completed a manuscript called Dreams From My Father, which just happened to strongly reflect the writing style of William Ayers, who just happened to trample on an American flag for the cover photograph of the popular Chicago magazine, which Obama just happened never to see even though it appeared on newsstands throughout the city.

            Obama was hired by the law firm Miner, Banhill and Galland, which just happened to specialize in negotiating state government contracts to develop low-income housing, and which just happened to deal with now-imprisoned Tony Rezko and his firm Rezar, and with slumlord Valerie Jarrett, and the law firm’s Judson Miner just happened to have been a classmate of Bernardine Dohrn, wife of William Ayers.

            In 1994 Obama represented ACORN and another plaintiff in a lawsuit against Citibank for denying mortgages to blacks (Buycks-Roberson v. Citibank Federal Savings Bank), and the lawsuit just happened to result in banks being blackmailed into approving subprime loans for poor credit risks, a trend which just happened to spread nationwide, and which just happened to lead to the collapse of the housing bubble, which just happened to help Obama defeat John McCain in the 2008 presidential election.

            In 1996 Obama ran for the Illinois State Senate and joined the “New Party,” which just happened to promote Marxism, and Obama was supported by Dr. Quentin Yong, a socialist who just happened to support a government takeover of the health care system.

            In late 1999 Obama purportedly engaged in homosexual activities and cocaine-snorting in the back of a limousine with a man named Larry Sinclair, who claims he was contacted in late 2007 by Donald Young, who just happened to be the gay choir director of Obama’s Chicago church and who shared information with Sinclair about Obama, and Young just happened to be murdered on December 23, 2007, just weeks after Larry Bland, another gay member of the church, just happened to be murdered, and both murders just happened to have never been solved. In 2008 Sinclair held a press conference to discuss his claims, and just happened to be arrested immediately after the event, based on a warrant issued by Delaware Attorney General Beau Biden, who just happens to be the son of Joe Biden.

            In 2003 Obama and his wife attended a dinner in honor of Rashid Khalidi, who just happened to be a former PLO operative, harsh critic of Israel, and advocate of Palestinian rights, and who Obama claims he does not know, even though the Obamas just happened to have dined more than once at the home of Khalidi and his wife, Mona, and just happened to have used them as occasional baby-sitters. Obama reportedly praised Khalidi at the decidedly anti-Semitic event, which William Ayers just happened to also attend, and the event Obama pretends he never attended was sponsored by the Arab American Action Network, to which Obama just happened to have funneled cash while serving on the board of the Woods Fund with William Ayers, and one speaker at the dinner remarked that if Palestinians cannot secure a return of their land, Israel “will never see a day of peace,” and entertainment at the dinner included a Muslim children’s dance whose performances just happened to include simulated beheadings with fake swords, and stomping on American, Israeli, and British flags, and Obama allegedly told the audience that “Israel has no God-given right to occupy Palestine” and there has been “genocide against the Palestinian people by (the) Israelis,” and the Los Angeles Times has a videotape of the event but just happens to refuse to make it public.

            In the 2004 Illinois Democrat primary race for the U.S. Senate, front-runner Blair Hull just happened to be forced out of the race after David Axelrod just happened to manage to get Hull’s sealed divorce records unsealed, which just happened to enable Obama to win the primary, so he could face popular Republican Jack Ryan, whose sealed child custody records from his divorce just happened to become unsealed, forcing Ryan to withdraw from the race, which just happened to enable the unqualified Obama to waltz into the U.S. Senate, where, after a mere 143 days of work, he just happened to decide he was qualified to run for President of the United States.

            Read more at http://theblacksphere.net/2015/02/obama-just-happened/

            I get it that you’re all atheists, like the murderer in North Carolina. Still, your beliefs are going to catch up with you in the next several months, not centuries.

          • 0 avatar
            Lou_BC

            @CJinSD – and what about Bush and Bin Laden since you like the whole association game?
            BTW, what was or is your point?

            No law against a Muslim being the head of the USA ………… or is there???????

          • 0 avatar
            CJinSD

            Law against a muslim being the POTUS? Nope. But there are plenty of laws that a muslim would be uncomfortable enforcing while fulfilling his duties as the chief executive of the US Constitution, as Barack Hussein Obama has demonstrated effusively.

            Do you suppose he lied about being a muslim the same way he lied about being for gay marriage? Naw, that would put you outside the joke and you’d have to face your limitations. What’s my point? If you need me to spell it out…

          • 0 avatar
            Pch101

            Perhaps Mary Barra is a Mooslim. Surely there must be some kind of connection between the subject of this blog post (which, if I recall correctly, was about GM repurchasing shares) and Obama’s birth certificate.

          • 0 avatar
            CJinSD

            Lou BC played the muslim card. I initially pointed out that one of Obama’s crony plants at GM wants to send cash out to Obama’s backers at the expense of GM’s long-term prospects, which will serve Obama’s message that capitalism is bad. Maybe you enjoy being a hand puppet. I’m not going to resist the urge to point out that you love the shocker. The details about who Obama is are only there for sentient beings.

          • 0 avatar
            Pch101

            I really hate to intrude on your wingnuttery, since you are so very proficient in that area, but Wilson is a Republican who was hired by Rattner.

            I would presume that Rattner, a Democrat, hired Wilson not because of his opposing political bent but because of Wilson’s background in investment banking, particularly with distressed assets (since GM was a distressed asset of a mega variety.) There are times when people get jobs because they know stuff.

            If you would put on your thinking cap, then it would be pretty obvious that Wilson is trying to stir up an issue that could get him a board position at GM. Those seats are nice ways to make easy money doing next to nothing, while having a chance to mingle with other 1%ers who can find other business to do together. It’s like joining a country club, except they’re paid to do it.

          • 0 avatar
            Lie2me

            … I’m still waiting for Kevin Bacon to show up in all of this

          • 0 avatar
            Pch101

            My next project will be an indie film called “Six Degrees of Mary Barra.”

            Mary likes Camaros.

            Camaros are pony cars, like Mustangs.

            A Mustang was driven by Steve McQueen.

            Steve McQueen was in “The Great Escape,” in which he attempted several times (without any success) to escape from the Nazis.

            Therefore, Mary Barra is a Nazi. I’m sure that there is a Saul Alinsky connection there somewhere.

          • 0 avatar
            Lie2me

            “Six Degrees of Godwin’s Law” FTW!

          • 0 avatar
            Pch101

            The Nazis just happened to build freeways. Therefore, freeways must be bad.

            As it turns out, GM cars are used on freeways. The Nazi connection could not be any clearer.

          • 0 avatar
            mkirk

            What is being overlooked in all this is that I’m pretty sure CJ just set the record for longest post ever here. I didn’t read last the first paragraph, but good job.

          • 0 avatar
            Lou_BC

            Funny stuff…… my off the cuff remark sure got things going :)

            BTW – I kinda liked John McCain over Obama. He just happened to be too white and too Bushy…..

            Palin was a bad choice for McCain but not for Tina Fey .

  • avatar
    cartunez

    Translation: The rats want off the good ship USA/GM.

    • 0 avatar
      APaGttH

      That’s not the translation at all – this is the new way of making institutional investors happy. Apple is going up to its butt in debt despite mountains of cash, borrowing to do their own stock buy backs because it helps pump up the values.

      It’s smoke and mirrors.

      • 0 avatar
        jim brewer

        Apple is borrowing the money to avoid a massive income tax hit when they repatriate foreign earnings; GM has no excuse. They just don’t have any better plans for the money.

        • 0 avatar
          Brad2971

          Yes, and you may have noticed current attempts to repatriate those foreign earnings at something of a discount to the regular 35% rate. Frankly, unless the countries in which those earnings are held are in the process of expropriating said earnings, neither Obama nor Congress needs to do jack about repatriation.

  • avatar
    gasser

    All the financial moves are just smoke and mirrors. Unless there is good product, GM will not do well. The money needs to be invested in product development, not papering up the books.

  • avatar
    marc

    I’ve read several articles/editorials recently about this plague of stock buy-backs which are essentially depriving the rest of the economy of money through wage increases or capital investments, so as to line the pockets of the super-already-rich. So much for trickle-down. There’s this long held myth that the corporation’s sole goal is to increase share value at any cost (my 401K thanks you), and CEOs’ pay structures have been set up to encourage this. We are now seeing a push back against this. I don’t know how successful it will be. It will be interesting to see how this story plays out, and I hope TTAC continues to follow up on GM’s part of the story. It should at least be more interesting and relevant than half naked women jumping on an Audi.

    PS. I can hear the click-clacking of keyboards now decrying me as commie pinko, conspiring with our socialist emperor to destroy the very foundations of the free world. So I will leave my comments to this, so as not to spend all day arguing with strangers.

  • avatar
    el scotto

    To carry on a theme: 8 billion spent on successful new vehicle platforms would be the best way to raise stock value. Not some accounting legerdemain that only benefits a very few and in the end, not GM itself.

  • avatar
    mikedt

    Activist investors won’t stop until every corporation is a mere shell of itself outsourcing every job to some third world country willing to work for pennies a day.

    I know some companies need a 2×4 across the side of the virtual head, but at the same time, it’s too bad more CEOs don’t do like Starbuck’s CEO and say, you don’t like the way we run things, sell your stock and buy another company.

    That’s the free market.

  • avatar
    jacob_coulter

    If they have the means for an $8 billion dollar stock buy back, how come they don’t have the funds to pay back their taxpayer “loan”?

    Of all the TARP loans, the biggest ones that went unpaid were to the automakers.

    To add insult to injury, GM also got to use the bankruptcy as a write off for billions in future tax obligations.

  • avatar
    APaGttH

    Ahhh yes, the stock buyback – awesome for institutional investors and pretty much terrible for everyone else.

    As others, I’d rather see GM invest $8 billion in great products, fixing the crap storm that is CUE, and make sure things like the ignition switch fiasco never happens versus increasing Bill Lumberg’s stock portfolio by 3/4 of a point.

  • avatar
    Lou_BC

    I agree with the sentiment that 8 billion would be better spent on R&D and the production of better products.

  • avatar
    CapVandal

    1. The biggest mistake GM made during its bankruptcy and recapitalization was NOT changing the name. All the owners (shareholders) were completely wiped out during the bankruptcy. The company was recapitalized through bailouts, the government owned the company, and then sold it to new investors by selling stock to the public.

    2. Share buybacks are financially equivalent to dividends, except for tax advantages to investors who wish to reinvest the returns in the firm. See any finance 101 textbook to answer questions about this. http://www.amazon.com/Fundamentals-Corporate-Finance-Standard-Educational/dp/0073226394/ref=asap_bc?ie=UTF8

    3. Buybacks are equally good for all investors. Individuals, pension funds for individuals, and anyone else that buys or owns stocks directly or indirectly.

    4. GM has $20 billion in cash. What should they do it? Give it back to shareholders or invest it in new products? If auto manufacturing is an awful business. Cars are commodities, three is global overcapacity, among other problems with the industry. If GM were in a profitable industry with good prospects, a buyback would make a lot of sense at today’s stock price. However, GM has to reinvest its entire earnings just to stay competitive. For the sake of the stakeholders (suppliers, dealers, etc) GM must reinvest the profits in the business just to stay in business.

    5. Avoid auto manufacturers as direct investments. Why? Just because.

    • 0 avatar
      jim brewer

      I take it all back. You are right. GM sells for less than 8x earnings. I assume that they pay a small dividend, so that means that part of their capital structure costs 13% or so. That’s crazy in today’s environment.

      They also don’t have much chance of matching that number in profit margin per car. If nothing else, they are vulnerable to a takeover at that price. Pull in some shares, maybe increase the dividend on the remaining shares to get the price up.

  • avatar
    stanczyk

    Stock Buyback : .. another .. ‘financial instrument’ that pupms ‘stock-exchange’ and ‘their ‘corporate’ virtual value’ ..

    Let me gues : This guy Harry J. Wilson that’s ‘helping GM’ is from Goldman Sach$ ?!? ..:) .. they’ll go bust ‘Greek style’..

    Pretty soon they will stop producing things(they won’t need machines ,.. they won’t need workers ..) , they will just make financial tricks , .. all of this will end up pretty ugly ..

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