General Motors shares rose after the automaker increased its stock buyback program by eighty percent, and lifted its profit forecast. Bobbi Rebell reports.
General Motors had good news on Wednesday, upping its profit forecast, and announcing plans to raise its dividend, and increase its share buyback program by eighty percent. Investors applauded the news, but the stock gave back much of its gains, as the reality of a more challenging future sank in. Kelly Blue Book's Jack Nerad: SOUNDBITE: JACK NERAD, EXECUTIVE EDITORIAL DIRECTOR AND EXECUTIVE MARKET ANALYST, KELLEY BLUE BOOK (ENGLISH) SAYING: "I think, General Motors is well positioned, but, I think, there are headwinds out there, and, I think, to get to where we got to in 2015, in 2016 is going to be even harder. In talking to a lot of top executives yesterday in Detroit, they all said, they peddled really, really hard to get to the numbers they got to at the end of 2015." General Motors and its rivals, including Ford, face slowing growth this year, as well as big shifts in technology and consumer behavior. For example, increasingly consumers want to buy rides from services like Uber, instead of cars. In fact, rival Ford had given a more tepid outlook a day earlier, warning that margins in the North American auto market could soon hit a plateau. That put pressure on the stock, even though the company announced a special $1 billion dividend. Also a concern for the industry, China's auto market, which is expected to also see flat growth, though at record levels just like the U.S.