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GM Reinstates Quarterly Dividend Suspended Since Start of Covid-19 Pandemic


General Motors Co.


GM 1.81%

mentioned Friday it plans to reinstate its quarterly dividend, after suspending it in April 2020 to protect money in the course of the early days of the Covid-19 pandemic.

The Detroit auto maker additionally mentioned it plans to renew opportunistic share repurchases, saying progress on key initiatives has instilled confidence it may possibly fund progress in electrical autos and different developments whereas returning capital to shareholders.

GM mentioned it expects to pay out its first dividend of 9 cents a share on Sept. 15 and plans to extend its present repurchase program of frequent inventory to $5 billion, up from the $3.3 billion remaining in this system.

GM shares rose 1.7% in premarket buying and selling Friday, following the information of the dividend reinstatement.

The transfer marks a shift from GM’s place early this 12 months. In February, Chief Govt

Mary Barra

mentioned the company wouldn’t resume paying out a dividend, to provide precedence to spending on EVs and different progress plans.

Within the spring of 2020, GM and different automotive makers suspended their quarterly dividend funds, citing uncertainty across the well being disaster and seeking to protect money as they shut down factories to adjust to lockdown orders and different Covid-19-related restrictions.

Since then, GM’s earnings have rebounded, and it has put aside billions of {dollars} to develop its lineup of EVs, together with hefty investments in battery factories. In all, the corporate plans to spend $35 billion on electrical and autonomous autos by 2025.

GM’s share worth has fallen about 34% because the begin of the 12 months, greater than these of rivals

Ford Motor Co.

and

Stellantis

NV.

Ford reinstated its quarterly dividend late final 12 months, after suspending funds early within the pandemic. The Dearborn, Mich., auto maker then mentioned in July that it will elevate the dividend cost to fifteen cents a share.

Ford and GM lately launched their first electrical pickup vehicles. WSJ auto reporter Mike Colias breaks down the completely different methods the 2 legacy auto producers are pursuing to carry their EVs to market. Photograph Illustration: Alexander Hotz/WSJ

When requested by an analyst this month in regards to the dividend, GM finance chief

Paul Jacobson

mentioned the corporate would analyze how a lot cash it had in its funds after making expensive EV investments.

“We’ve obviously been through a lot of turmoil over the last few years,” Mr. Jacobson mentioned. “But as we start to emerge from that and maybe we start to get through into better, more stable economic times, we can have that consistent return.”

GM’s earnings have remained wholesome in current quarters, lifted by constrained stock ranges at dealerships and patrons’ paying larger costs for its autos. Nonetheless, its net income fell 40% in the second quarter of 2022, largely as a result of a loss in China and supply-chain troubles that left the corporate with tens of hundreds of unfinished autos it couldn’t promote.

Firm executives in July mentioned they anticipate manufacturing facility output to enhance within the second half of the 12 months, and GM maintained its full-year guidance.

GM mentioned it’s nonetheless taking precautions to protect in opposition to weakening financial situations, together with reducing discretionary spending and curbing hiring. Ms. Barra mentioned in July {that a} restructuring in 2019 and 2020 minimize about $4.5 billion in annual prices, serving to put together GM for any downturn.

Write to Nora Eckert at [email protected]

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