General Motors stock surges 10% as the automaker announces $10 billion share buyback

• General Motors stock jumped more than 10% Wednesday on plans for a $10 billion share buyback and dividend hike.
• It comes as the automaker pulls back on its EV and driverless vehicle ambitions.
• GM is also navigating higher labor costs amid the new union contract with the United Auto Workers. 

Shares of General Motors climbed as much as 10.7% on Wednesday following the company's plans to boost shareholder returns.

The automaker announced a $10 billion accelerated repurchase program and said it will increase its common stock dividend by 33% beginning in 2024. 

The moves come as GM pulls back on its electric vehicle and autonomous driving ambitions, while also navigating higher labor force costs amid its new contract with the United Auto Workers. 

"We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs," GM Chair and CEO Mary Barra said in a statement. "With this clear path forward, and our strong balance sheet, we will return significant capital to shareholders."

GM also reiterated its full-year guidance and added that it will fund its share buyback by tapping capital that was previously intended to use for electric vehicles and driverless cars. The pivot will bring investors' attention to the core business of selling trucks powered by gas and diesel. 

Connected to the share repurchase program, the company said it will "advance an aggregate of $10.0 billion to the executing banks and will immediately receive and retire $6.8 billion worth of GM's common stock."

Prior to the announcement, GM had roughly 1.37 billion shares of common stock outstanding. 

GM is only recently emerging from the six-week strike that cost the company more than $1.1 billion during the third and fourth quarters. GM lost more than 31,000 units of production, more than competitors Ford and Stellantis.

Despite Wednesday's jump, GM stock is down 5.56% year to date.