General Motors has made the next move in its pecuniary chess game with a group of activist investors led by Harry J. Wilson. At the beginning of the month, after announcing a dividend of $0.20 per share, GM said it might increase its dividend later this year and consider a "further return of capital to shareholders" once it had got clear of potential liabilities due to the ignition switch recall.

Last week it came out that Wilson, who was an adviser on the Auto Task Force, is leading four investment funds in trying to get GM to spend $8 billion of its $25 billion cash on a stock buyback to increase share value. He's going to make his pitch during the company's annual meeting in June and at the same time nominate himself to the board.

Reuters reports that GM has retained Goldman Sachs and Morgan Stanley for "advice" on how to respond to Wilson's advances; naturally, none of the firms will comment publicly on the consultations. In addition to the integrity of its "fortress" balance sheet and the legal repercussions of the recalls last year, GM is probably thinking about the $9 billion it wants to put toward R&D and new vehicles. Spent wisely, that could increase shareholder value even more than a buyback, but that would force the investor group - which owns about two percent of GM stock - to, you know, wait.

Another Reuters report shows other investors and analysts taking either side, one saying that $25 billion is "beyond wisdom and into excess capital," while another asks, "Are these hedge fund managers thinking about GM over the next ten years or the next ten weeks?" And Automotive News has piece that provides a bit more background on Wilson's focus on GM, explaining that his interest goes beyond a payout; he says what he really wants long-term financial progress to come more quickly than it's happening now, and he's not sure the GM veterans at the top can or will make that happen. A tentative solution proposed by outsiders in the meantime is for GM to offer a buyback of $4 billion at its annual meeting.

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