How should GM spend its pile of cash?

General Motors' stock is sputtering. Shares are down 16 percent from GM's November IPO price.

Meanwhile, the automaker is sitting on a $30.6 billion pile of cash and marketable securities.

Those conditions scream out for one thing in the minds of many shareholders: Stock buyback.

A buyback could be doubly enticing to GM. Not only might it lift the stock price, but GM potentially could shed some of its Government Motors stigma by buying those shares from the federal government, which still owns 33 percent of the company.

GM is considering doing just that, Bloomberg reported earlier this month.

Not so fast, says one GM analyst.

Morgan Stanley's Adam Jonas lays out a few compelling reasons why GM shouldn't cave to the impatient demands of short-term investors.

For starters, it's early. Even though GM made $4.67 billion last year in a sluggish market, it's still in a rebuilding mode. In the outside chance that the global economy tanks for a couple years, Jonas figures that GM could burn through as much as half its cash.

"Each $1 billion of cash contributes greatly to GM's life insurance policy," Jonas wrote in a research note Thursday.

Plus, GM already will be spending wads of cash -- $39 billion in capital expenditures through 2015, Jonas figures -- which will be "critical to reviving the model line-up."

GM spokesman Jim Cain says the company is using its cash to strengthen its balance sheet, fully fund the pension and on "products to fuel profitable growth around the world." He says GM hasn't ruled out other uses of its cash.

Jonas cites the need to build GM Financial into a true captive as yet another reason to hang onto its reserves.

But he sums up his argument with a line that most of GM's suppliers, dealers and customers likely would applaud.

"New product execution, not buybacks," he writes, "is by far the most important factor within control of GM management."

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