As broader-market indices turned red on Friday, General Motors (GM -0.24%) investors were likely cheering. The stock moved higher on news that the auto company is bringing back its dividend and expanding its share repurchase authorization. In addition, the company announced plans for significant investments to grow its business in the coming years. The moves imply that GM is confident in the company's future, giving shareholders a reason to be incrementally more optimistic.

Here's a closer look at GM's move to return more capital to its shareholders and double down on its growth plans. More importantly, we'll take a look at why investors should be happy with this news.

GM's plans to return cash to shareholders

In April of 2020, GM suspended its quarterly dividend payment amid uncertainty surrounding the coronavirus pandemic. More than two years later, GM is bringing back a payout, albeit at a significantly reduced level. GM will pay out a quarterly dividend of $0.09 starting next month. This is down from its former quarterly dividend of $0.38. 

But GM is returning capital to shareholders in more ways than just dividends. It also announced that it is boosting its share repurchase program from the $3.3 billion authorization it had previously to $5 billion. Highlighting how significant this program is, it represents 8% of GM's market capitalization.

Aggressive investments

In addition to announcing an expansion to its capital return program, GM CEO Mary Barra said the company will be "investing more than $35 billion through 2025 to advance our growth plan, including rapidly expanding our electric vehicle portfolio and creating a domestic battery manufacturing infrastructure."

A sign of a rebounding global supply chain?

While GM investors should certainly be happy, the news could have even broader implications beyond just the auto company's shareholders. The aggressive posture from management suggests that the auto industry may be picking up steam again following a lull that has been caused by global supply and logistics constraints.

Both GM's CEO and the company's CFO, Paul Jacobson, said that the company's momentum and visibility of some of its key strategic initiatives are important factors behind the company's decision to be more aggressive with its capital return program and its investment.

Management's growing confidence in GM's business isn't necessarily surprising; Barra said in the company's second-quarter earnings call that year-over-year changes in production have been improving recently. Management also said demand is strong for its new electric HUMMER and LYRIQ vehicles. In addition, demand is particularly strong for its trucks.

But despite the strong demand GM is seeing for key products, supplies are still "below optimal," making many customers wait for delivery of their vehicles. Perhaps GM's press release today is a strong signal that the company believes it's making progress on servicing this pent-up demand.

Whatever the case, one thing is clear: GM is confident in its long-term potential. Otherwise, the company likely wouldn't be authorizing a major expansion to its share repurchase program, reinstating its dividend, and announcing big spending plans all at the same time. This is good news for both GM shareholders and the market at large. Given how sprawling GM's global supply chain is, progress at the automotive giant may signal that the supply chain environment is improving for other companies, too. If it's not indicative of the global supply chain, it at least likely bodes well for many of the companies tied to the automotive industry.