GM Chief Akerson Buys Shares Before Decline to Low Since Automaker’s IPO
General Motors Co. Chief Executive Officer Dan Akerson purchased $250,500 in shares of the automaker, a day before the company fell to a new low.
Akerson bought 10,000 shares yesterday at $25.05, Detroit- based GM said in a regulatory filing. Akerson, 62, owns 103,600 shares after the purchase, today’s filing said.
The stock-market rout that sent the Dow Jones Industrial Average to its lowest since September 2010 helped send GM shares a new closing low in New York Stock Exchange composite trading since the automaker’s November initial public offering. GM fell $1.62, or 6.3 percent, to $23.92 as of 4:15 p.m, according to Bloomberg.
Akerson, GM’s CEO since September, said yesterday he was unsure whether “turmoil” in the securities markets may discourage consumers from buying new vehicles. The largest U.S. automaker has forecast at least 13 million new-vehicle sales in 2011, including medium- and heavy-duty trucks.
“We’re a little unsure of these numbers,” Akerson said at a conference with analysts yesterday. “When the market does recover, we should be able to really leverage it beyond what you’ve seen so far since our IPO.”
Akerson’s purchase of GM stock is the second in less than three months. He bought $939,900 in shares of the automaker on May 11, when GM traded at $31.33, according to a filing the following day.
GM will benefit from moves to cut costs planned for the next decade, Akerson and other executives said yesterday.
Dan Ammann, GM’s chief financial officer, said frequent changes to the automaker’s product plan waste $1 billion a year. Canceling or delaying product programs adds to engineering costs because GM has to pay more to suppliers when orders change, Ammann said during a presentation.
GM plans to reduce the number of architectures that its vehicles are built from to 14 by 2018, from 30 in 2010. The number of engine platforms will be cut by about half in the next decade, according to a slideshow presentation.
GM may be able to improve its profit margins by 2.3 percentage points from last year to 7.4 percent by 2015, Barclays Capital analyst Brian Johnson said today in a research note. GM didn’t commit to a specific margin target, said Johnson, who rates GM “overweight” and is based in New York.
At today’s closing price, the value of the U.S. Treasury Department’s stake in GM has plunged $7.53 billion since Jan. 7. GM shares closed that day at $38.98, the highest since the IPO.
Treasury holds more than 500 million shares, making it GM’s largest owner. The government’s stake is worth $12 billion, down from $19.5 billion as of Jan. 7.
The U.S. Treasury took a 61 percent stake in GM as part of its $49.5 billion bailout of the automaker. The Treasury sold $13.6 billion worth of stock in the November IPO.
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