Berkshire Hathaway Chief Executive Warren Buffett, one of the best-known US billionaire entrepreneurs and among others one of the biggest stakeholder in General Motors questioned the recent drive to change the automaker’s management board competence.
Buffet specifically referenced former US auto task force member Harry Wilson’s drive – together with partnering hedge funds – to get a seat on the company’s management board to promote an $8 billion share buyback. He questioned anyone’s implication and focus if the strategy only considered the short-term performance of the largest US carmaker and the third biggest in the world. “I totally disagree with the idea of putting somebody on the board who has an option on some other people’s stock which is only good for two years,” Buffett said on CNBC. “It’s just not the way to run a business.” In a swift reply sent to CNBC, Wilson claimed not to be a short-term strategist when dealing with General Motors – owning shares in the company since 2011. He also added that his views fall in line with those expressed by Buffet – who said he was in full support of the current GM chief executive, Mary Barra.
Wilson, together with a part of GM hedge funds – owning about 2 percent of the automaker’s stock – have announced they intend to pressure the company to divest part of its large cash pile on a $8 billion stock buy back after the June annual shareholders meeting, adding they would also push for Wilson’s election on the carmaker’s management board.