MW GM raises dividend and unveils $6 billion buyback program to cheer weary shareholders

By Ciara Linnane

Uncertainty about tariffs and labor-cost headwinds have weighed on stock this year

General Motors Co.'s stock jumped 4.2% early Wednesday, after the auto giant said its board has approved a 3 cent-per-share increase in its quarterly dividend in addition to a new $6 billion share-buyback authorization.

It was the latest move by the company to please shareholders, spooked by the threat and uncertainty about how tariffs will impact the business and the pressure on consumer spending after a long period of high inflation.

GM's stock has fallen 12.3% in the year to date, while the S&P 500 has gained 1.3%.

The new dividend will kick in with the next dividend announcement in April, while the company has entered a $2 billion accelerated share-buyback program with a group of banks, led by Barclays and JPMorgan.

"The GM team's execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders," Chief Executive Mary Barra said in prepared remarks.

The news is part of GM's $(GM)$ capital spending plan for 2025, which is expected to range from $10 billion to $11 billion, including investments in the company's battery cell manufacturing joint ventures. Spending on R&D is expected to top $8 billion.

The dividend increase will boost the quarterly payout to 15 cents a share. The ASR program is expected to conclude in the second quarter. The company has $4.3 billion remaining on its authorization for opportunistic share buybacks.

"We feel confident in our business plan, our balance sheet remains strong, and we will be agile if we need to respond to changes in public policy," Chief Financial Officer Paul Jacobson said in a statement.

GM's most recent earnings beat expectations and the company offered better-than-expected guidance for the current year. But the numbers were overshadowed by uncertainty about the policy moves planned by the Trump administration, and the company said it faced headwinds related to high labor costs and an expected 1% to 5% price drop in North America.

Barra told analysts that the carmaker is tracking "a lot of moving parts" in federal policy under the Trump administration, including the fate of the electric-vehicle tax credits in the 2022 Inflation Reduction Act, as well as the planned import tariffs against Mexico, where GM makes vehicles.

"What I would say is whether we're talking about IRA or tariffs, we've got multiple playbooks that we have been working on [to] make sure that we can respond or even anticipate some of those moves," Barra said.

Read now: Here are all the Trump tariffs hitting the economy in the coming weeks

Like its peers, GM is struggling with weak demand for electric vehicles, which have proved too expensive for many buyers. Consumers are also concerned about the network of charging stations being insufficient and the time it takes to recharge a battery.

Carmakers, who went all in on EVs some time back, have had to pivot back to hybrids and conventional internal combustion engine vehicles.

The stock has gained 17.4% in the last 12 months, while the S&P 500 SPX has gained 17.5%.

-Ciara Linnane

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February 26, 2025 07:08 ET (12:08 GMT)

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