2 words tell you everything you need to know about what GM thinks of David Einhorn's stock scheme (GM)

•GM has a history with financial schemes that have turned into disasters

A battle is shaping up between General Motors and activist hedge funder David Einhorn's Greenlight Capital. Einhorn is urging shareholders to vote for a slate of three board candidates that he's nominated, and last month he proposed that GM's stock be split into two classes: one committed to paying a dividend, the other delivering growth.

Einhorn thinks the stock has severely underperformed the market during an epic sales boom for the US auto market.

By the numbers, he's right: while the S&P 500 has surged since GM's 2010 post-bankruptcy IPO, GM shares have moved up only about 5%, at a time when the company has notched years of profits, bolstered its balance, sheet, spent billion on stock buybacks and created a dividend yield of over 4%.

GM's rejected the plan, but Einhorn isn't backing down. In a recent letter to GM investors, he urged them to vote for Greenlight's board slate, argued that the dual-stock structure could add upwards of 80% to GM's valuation (current market cap: $50 billion) — and accused GM of misrepresenting his proposal to the ratings agencies, which shot the idea down as being credit negative for the giant automaker.

modifying the Plan before giving it to the credit rating agencies to review

"It's an age-old problem," said Peter Bible, the CEisnerAmper do you get more value out of GM stock?"

Bible said that the type of financial engineering that Einhorn wants "has been going on for a long long time," citing the disastrous spinoff of parts maker Delphi in the late 1990s, which led to a 2005 bankruptcy and four years of restructuring, with an IPO in 2011. Throughout this period, GM pumped money into the company to keep it going and to satisfy pension obligations.

"Even if you did do something like what Einhorn recommended, it wouldn’t be the panacea that he thinks," Bible said. "

GM management doesn't want to fight a proxy battle with Einhorn, but it's clearly prepared to do it. For every shot that Greenlight fires, GM returns fire with heavy artillery.

But that doesn't the company isn't frustrated that it's dealing with its second activist attack in two years.

"The old adage is that if it isn't broke. don’t fix it," Bible said. "Things in the company have been going well. They’ve fought long and hard. The last thing they need is another shareholder battle."