GM CEO Mary Barra, Jamie Dimon Speaks, Remembering Charlie Munger 11/29/23

SPEAKER_1 (0:00)

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David Faber (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:37)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at the New York Stock Exchange. Future solid as lower yields continue to provide ammo for the bulls, 10-year hits four and a quarter. A big morning on tap, Dealbook Summit in New York. Andrew Ross Sorkin has Jamie Dimon and NVIDIA's Jensen Wong.

Meantime, Richmond Fed President Barkin at the CNBC CFO Council Summit.

And in a few moments, GM's Mary Barra will join us reinstating full-year guidance, a new buyback in Divhike, GM shares up 9 percent pre-market. A lot of news here.

Jim Cramer (1:08)

That accelerated buyback is really extraordinary.

Real commitment to shareholders. And I think that especially in light of Adam Jones' note yesterday talking about how much they burn money on R&D, this calls all that into question. Mary Barra has been under fire, I think, because of Cruze, which is the problem they have with the EV.

David Faber (1:30)

Well, no, self-driving.

Jim Cramer (1:31)

Self-driving. They spend money on EV. Self-driving.

David Faber (1:34)

And then, obviously, rolling back in terms of at least their ambitions in EV in terms of timeline.

Jim Cramer (1:39)

Right. Battery problems. She even highlights that. But David, what I'm surprised that even after all that, the amount of money they have is extraordinary.

David Faber (1:46)

Well, I guess is that almost part of the point here of just saying, hey, look what we can do?

Jim Cramer (1:50)

I think it's definitely the case. I wouldn't be surprised if Ford didn't follow suit. These got... This thing sells at four times earnings, Carl. I mean, at a certain point... Four times earnings. Four times earnings. Now, typically, that means that earnings are going to be cut in half. It's really selling eight times next year.

But this is a kind of encouraging thing to buy back this amount.

Very rare.

Some people say she's taking it in private. You can't do that. Obviously, they have a huge debt position. But I've got to tell you, right after the cruise, after the self-drive, what you know what I'm going to ask about since I was in one, this is quite impressive. And I think it says, we're not dead, we're good.

Carl Quintanilla (2:26)

There's going to be some savings on the cruise front. Meanwhile, we've got some numbers on the impact of the strike, Jim, 1.1 billion adjusted EBIT impact. Yesterday, Jonas had a note, Morgan Stanley, looking at the time it takes an average S&P or to spend their market cap in capex R&D. It's normally about 50 years.

In the case of GM and Ford, it's about two years.

Jim Cramer (2:49)

What was really incredible was that I first thought it was a construct because, sure, the S&P, I mean, you talk about a lot of companies that have spent a bit of R&D. Then she compared it to Caterpillar, which I think is, he compares to Caterpillar. That's a very fair one. If Mary was looking at that and said, well, geez, Caterpillar is 26, 27 years. It was a great piece of, obviously did not motivate this, but I do think that the Sergio quotient did make me feel that I wanted a reason for being. I wanted a reason to own these stocks after how much money they spent on R&D and yet name me five brands of GM, okay?

But throughout all this, they still have giant cash flow.

David Faber (3:27)

They still make money from selling good old ICE vehicles.

Jim Cramer (3:31)

Now, she was confessed about EVA, battery is not good.

David Faber (3:35)

Right.

Jim Cramer (3:37)

Well, we're going to, again, have the opportunity to ask. If you have self-drive, not that good, you have batteries, not that good, but you have ICE, very good.

David Faber (3:44)

Right. But of course, it's all about what's coming and investors have been paying for those future cash flows conceivably. You have to make that transition. Eventually, we will get to both EV and autonomous.

It may take a lot longer than we think.

Jim Cramer (3:58)

But GM and Ford both pride themselves on having vehicles that people want and need and can afford. Do the EVs fit those categories? Maybe the F-150.