The writer, a Los Angeles freelancer and former Detroit News business reporter, writes a blog, Starkman Approved.
By Eric Starkman
Ouch. Google’s Waymo, once considered a technology laggard behind GM’s Cruise driverless taxi subsidiary, is reportedly in discussions to raise more than $15 billion at a valuation of at least $100 billion. Even with GM’s stock trading near multi-year highs, investors would be valuing Waymo at roughly 40 percent more than General Motors itself.
Waymo photo
That Google is seeking to raise “only” $15 billion to continue financing Waymo’s fast-growing operations undermines GM CEO Mary Barra’s argument for shutting down Cruise’s business a year ago this month because it was burning too much cash. Over the past three years, GM has spent roughly $25 billion buying back its own stock, a move that boosted the share price by shrinking the number of shares outstanding.
In 2022, Barron’s reported that GM insisted Cruise was worth $30 billion, even as the company bought back part of an institutional investor’s stake at a valuation well below that figure. For years, Barra maintained that Cruise would one day generate $50 billion in annual revenue and repeatedly chastised Wall Street for failing to credit Cruise’s value, almost until the moment she shut the unit down.
Aggressive Ambitions
GM's Cruise
Cruise pursued more aggressive ambitions and was among the first companies to deploy fully driverless robotaxis at scale in a major U.S. city, including nighttime operations. Although Waymo technically launched driverless rides earlier, Cruise pushed harder into dense urban environments rather than more forgiving suburban ones.
Cruise was widely perceived to have an edge because it used customized GM vehicles and benefited from GM’s manufacturing support, allowing for tighter integration between hardware, software, and vehicle design.
By contrast, Waymo relied on partnerships and retrofits, which some engineers viewed as a disadvantage.
Acquired in 2016
Dan Ammann (Linkedin photo)
GM acquired Cruise Automation in 2016 for about $581 million, a move spearheaded by then-CFO Dan Ammann, long viewed as a contender for the top job before Barra was named CEO in 2014. Ammann believed deeply in Cruise’s potential and in 2019 became its CEO, scaling the unit to a GM-declared valuation of roughly $30 billion. Cruise co-founder Kyle Vogt remained with the company, transitioning from CEO to chief technology officer.
Ammann departed in 2021 after reportedly clashing with Barra over plans to take Cruise public, arguing that the business could grow faster outside GM’s corporate orbit. Barra, by contrast, sought to retain control of Cruise and its autonomy technology.
Cruise later ran afoul of regulators under Vogt’s leadership, culminating in a high-profile accident where a pedestrian was dragged by one of its taxis. Cruise reportedly settled with the pedestrian for between $8 million and $12 million. GM announced last December it would abandon Cruise, after investing more than $10 billion in the business.
When the chair of an upstart company is publicly telling Wall Street that the business will one day generate $50 billion in annual revenue, it is hardly surprising that executives feel pressure to cut corners.
Sundar Pichai (Linkedin photo)
By contrast, Waymo pursued a more cautious growth strategy. Even as its valuation has climbed, Alphabet CEO Sundar Pichai has largely avoided grandiose revenue projections. Billionaire tech investor Vinod Khosla has suggested autonomous driving could ultimately be worth trillions, but Waymo’s leadership has largely let performance, not hype, do the talking.
In the end, Cruise became a case study in what happens when board oversight yields to executive hype, while Waymo demonstrated the slow, unglamorous path to credibility.
Damning Research Report
As for GM’s stock buybacks, a research firm called Trefis recently issued a damning analysis of GM’s capital returns since Barra assumed command. Over the past decade, General Motors returned roughly $45 billion to shareholders through dividends and stock buybacks. According to Trefis, GM has returned 58.4 percent of its current market capitalization to shareholders, ranking 61st all-time in absolute dollars returned.
That places GM alongside banks, oil majors, and other mature incumbents with limited growth prospects, not technology-driven companies supposedly reinventing transportation. By comparison, Microsoft, Meta, and Google returned only about 10 to 11 percent of their market capitalizations over the same period, precisely because they were reinvesting heavily in growth.
Barra has repeatedly urged Wall Street and the media to regard GM as a technology company, not an old-line automaker. The reality looks different. Over the past 12 months, GM’s revenue growth was just 2.6 percent. The company posted periods of negative free-cash-flow margin, and its operating margins trailed the S&P median by a wide margin.
Barra’s buybacks did not signal strength so much as they compensated for weak underlying financial metrics. That distinction matters. GM was not supposed to be run like a private-equity firm milking a legacy business for cash. Barra positioned the company as a future-facing mobility and technology leader, with Cruise as the crown jewel.
Yet while GM devoted roughly $25 to $30 billion to buybacks, it balked at sustained, aggressive investment in autonomy.
Use of Capital
GM CEO Mary Barra
Companies return cash to shareholders when management believes it has no better use for the money. Barra’s claim that Cruise was simply too expensive to support is difficult to square with the record. GM had excess capital. Barra chose to use it to boost the company’s stock price in the short term rather than invest in the future.
Notably, Barra was among the biggest beneficiaries of GM’s stock buybacks.
Between 2020 and 2024, a substantial portion of Barra’s compensation came in the form of stock and options, much of which she proceeded to liquidate while GM was spending roughly $25 billion repurchasing its own shares.
SEC filings show she sold nearly one million shares and option equivalents during this period, largely at prices clustered in the high $50s and, in the case of exercised options, at even lower effective levels. In total, the transactions generated roughly $35 million in proceeds, converting equity awarded during GM’s much-touted transformation years into cash at what now appears to have been a depressed valuation.
The governance concerns were not merely retrospective. In 2023, independent proxy advisory firm Institutional Shareholder Services urged GM shareholders to reject Barra’s executive compensation package, citing a “pay-for-performance misalignment” and warning that sufficient mitigating factors had not been identified.
Performance Goal Posts
ISS specifically criticized GM for setting incentive targets below prior-year goals and actual performance. While the shareholder vote was non-binding and the package was ultimately approved, the recommendation underscored unease among governance experts about alignment at the top.
Barra’s dual role as chair and CEO concentrates power at the top, a governance structure frequently criticized by proxy advisors and governance experts, particularly when pay and performance alignment is already under scrutiny.
Even after a modest 3.9 percent pay cut, Barra still received $27.85 million in 2023, including roughly $14.6 million in stock and $4.9 million in options, compensation that continued to swell the very equity she began liquidating in 2024.
The upshot: GM deployed tens of billions in shareholder capital to support the stock price, while its CEO steadily reduced her personal exposure at those same levels.
The corporate media remains largely enamored with Barra, rarely scrutinizing her leadership, let alone criticizing it. For now, Wall Street has turned more bullish on GM’s stock, encouraged by Barra’s assurances that the company will refocus on high-margin trucks and SUVs rather than costly bets on autonomy and electrification.
Among GM’s rank and file, the picture looks different. Workers at Factory Zero in Detroit have taken note that profits have flowed toward stock buybacks rather than long-term job security. With more than 1,145 employees slated to lose their jobs and frustration growing among the UAW’s rank and file, Barra may soon be reminded that financial engineering plays far worse on the factory floor than it does with analysts.
