Oct 4 (Reuters) – Hedge fund Engine No. 1 on Monday formally introduced it has taken a stake in General Motors Co (GM.N) and was supportive of its transition to battery electrical automobiles, sending the shares of the No. 1 U.S. automaker up 3.2%.
The place of assist for GM was in distinction to the hedge fund’s against-the-odds problem in opposition to Exxon Mobile Corp (XOM.N) earlier this 12 months that enabled it to land three board seats. Engine No. 1 had criticized the power big’s observe report and targets on lowering its carbon footprint. learn extra
However, Engine No. 1 mentioned in an announcement on Monday that it believed within the path GM and Chief Executive Mary Barra have laid out, focusing on the elimination of tailpipe emissions in all gentle automobiles bought by 2035.
“The company’s early lead on battery technology, along with Mary Barra and the board’s leadership, creates tremendous advantages,” Engine No. 1 founder Chris James mentioned. “There’s a narrative that only tech companies can move quickly to embrace change and win as the world changes. We don’t think that’s true. GM has that leadership.”
Engine No. 1 took its stake in GM in August however had not spoken publicly about its intentions across the automaker since then. Engine No. 1 has a stake of virtually 400,000 shares in GM, in response to Refinitiv knowledge.
Engine No. 1 mentioned it has had “very constructive and collaborative two-way conversations” with GM, and mentioned the automaker was poised to “recapture market share” because of its benefits in battery expertise.
GM has mentioned it should spend $35 billion on electrical and self-driving automobiles by 2025 and is predicted to stipulate further monetary targets by 2030 on Wednesday at an investor convention. learn extra
Engine No. 1 was launched in December 2020 and instantly made a splash by taking over Exxon and pressuring the oil big to scale back its carbon footprint.
Coming from a tiny agency, based by veteran investor James, the battle to problem Exxon rapidly become a David versus Goliath narrative on Wall Street, the place many seasoned buyers anticipated the newcomer to falter. But the arguments resonated with a few of the world’s greatest cash managers, together with Vanguard, BlackRock and State Street, which supported Engine No. 1’s bid to win board seats.
Engine No. 1’s activism campaigns are run by Charlie Penner, who joined the brand new agency from activist agency Jana Partners the place they made headlines by taking over Apple (AAPL.O) to push the iPhone maker to do extra to restrict kids’s smartphone use. Soon after the Exxon win, Engine No. 1 launched an alternate traded fund, betting that Main Street buyers need portfolios to again environmental, social and governance proposals.
The hedge fund additionally launched a white paper on Monday detailing why the auto business should transition to battery electrical automobiles and what function automakers, particularly GM, will play in that transition.
“We value the perspectives of all stakeholders as we continue driving the future of mobility,” GM spokesman Jim Cain mentioned in an electronic mail.