Ms. Barra managed to get Mr. Wilson to relinquish his bid for a board seat with a $5 billion buyback and by setting up guidelines to return money to investors. GM shares rose 3 percent on Monday to $37.66.
Mr. Wilson was working with four hedge funds that collectively own more than 2 percent of the stock. GM said it will adopt a strategy to return free cash flow to shareholders while keeping investment grade credit and a minimum balance of $20 billion.
The agreement with Mr. Wilson ends two months of discussions in which he urged Ms. Barra to return money to shareholders and be more open about company performance targets. As part of the announcement, GM also said it's investing in its business with a target of driving 20 percent returns on invested capital and will update shareholders on its progress every quarter.
Mr. Wilson said talks were not contentious and that GM's current leadership is more open than previous management.
“Mary's highly thoughtful approach is a sea change from the old GM, and it's why we were able to come to a win-win conclusion so quickly,” he said in a telephone interview March 9.
GM shares have gained 7.9 percent this year.
The former member of President Barack Obama's Auto Task Force pressured GM, citing shareholder frustration. The auto maker's stock has bounced around since its $33-a-share initial public offering in November 2010. The shares rose to $39 in January 2011 and reached a closing high of $41.53 in December 2013. GM shares rose more than 4 percent on Feb. 10 when the company disclosed that Wilson was urging a share buyback and asked for a board seat.
Now Ms. Barra will have to deal with the possibility of union frustration. At least in this case, her experience as a manufacturing engineer puts her in a more natural position than dealing with congressional hearings on safety recalls or under the eye of investors.
That doesn't mean the union will go easy.
“The union is going to say, ‘Don't tell us no, because you didn't say no earlier when you could have saved several billion dollars in your arrangement with Wilson,” said Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass. “You managed to spend in March very easily.'”
This Bloomberg News report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.