© GENERAL MOTORS CORPORATION’S ANNUAL STOCK HOLDERS MEETING: JUNE 6, 2000 :
Annual Stock Holders Meeting
G. Richard Wagoner, Jr.
Chief Executive Officer and President General Motors Corporation
June 6, 2000
Thank you, Jack. Good morning, ladies and gentlemen. I'm pleased to report that the state of the business at General Motors Corporation is strong, and as suggested by the baby on the cover of our 1999 Annual Report, we believe our company's future opportunities are virtually unlimited. Let me start with a brief review of 1999 -- a strong year for GM. Our consolidated net sales totaled a record $177 billion, up almost 14 percent over 1998. Our earnings reached $5.6 billion, or a record $8.53 per share -- almost double the strike-effected 1998 results. Also in 1999, taking advantage of the record industry sales in North America and Europe:
We've taken a unique approach to the opportunities presented by industry consolidation. Since the early 1970's, GM has formed long-term relationships through minority equity holdings; first with Isuzu in 1971, then Suzuki in 1981, and then a 50-percent stake in Saab in 1990. The benefits from these partnerships have convinced us that an alliance approach is the best way to participate in the current industry consolidation.
So, in recent months, we have picked up the pace. In December, we took
a 20-percent equity stake in Fuji Heavy Industries and its Subaru brand.
We will benefit from Fuji's strength in all-wheel-drive systems and continuously
variable transmissions, while Fuji will gain access to GM's technology,
global purchasing expertise, and worldwide distribution network. And, it's
important to note that Fuji chose General Motors as its partner specifically
because of our good track record with alliances. In March, we announced
an agreement to take a 20-percent stake in Fiat Auto, a major industry
player in Europe and Latin America. With Fiat, we foresee tremendous mutual
cost-savings opportunities in areas like powertrain, purchasing, and finance-company
operations, as well as the prospect of growing our businesses with such
exciting possibilities as bringing Alfa Romeo back to the U.S. market --
all without the cultural trauma and capital commitment involved in a full
merger. Because of our alliance approach, we have been able to fund these
many relationships in a short time while retaining a strong financial position,
so we can -- among other things -- proactively participate in growth opportunities
and any future consolidation of our industry. In the rapidly changing global
automotive landscape, we believe this sets General Motors apart. It's a
different business model -- one we think is right for today's circumstances.
As I noted before, at GM we are working to combine being fast with
being big. We have moved "going fast" to the top of our priority list,
and have a broad range of initiatives throughout our company to foster
speed. None is more important than embracing opportunities presented by
the Internet.
And we are addressing e-business on all fronts. In the B2C, or "Business-to-Consumer" arena, we have e-GM in the lead. We are experimenting with different Internet ideas in countries ranging from Taiwan to Argentina, from the U.K. to the U.S. -- and then sharing our learnings in this fast-moving area to ensure that we stay in the lead. One of e-GM's main areas of focus is GM BuyPower.com, the most frequently visited automotive OEM website in the world, with some three million visits in the first quarter of this year alone. GM BuyPower.com is still the only automotive Internet website that can pinpoint the exact vehicle a shopper wants to buy, and then identify the closest dealer with that vehicle in stock. With this and other initiatives, our intent is to make GM the industry leader in Internet customer service. B2C has seen much of the action so far-but B2B, or the "Business-to-Business" area, has the potential to radically transform the entire way we conduct our business -- from product development, to manufacturing flexibility, to supplier integration, to fast and responsive delivery. One B2B initiative we're very excited about is GM TradeXchange, which was created last fall, and quickly established itself as one of the world leaders in Internet-based B2B transactions. Last December, TradeXchange conducted the industry's first business-to-business Internet auction of machinery and equipment. In February, less than four months after it was created and in response to strong input from our suppliers, we announced that TradeXchange would be merged with similar efforts at Ford and DaimlerChrysler to create the world's largest Internet-based virtual marketplace. The merged organization is now called Covisint. It will help us work with our suppliers to capture the full value of e-business applications to the benefit of our customers and shareholders, as soon as possible.
TradeXchange conducted a million dollars' worth of business last year
-- and already more than $250 million so far this year. Next year, we expect
Covisint to account for a large percentage of the more than $240 billion
that GM, Ford, and DaimlerChrysler purchase from suppliers every year,
not to mention the $500 billion the suppliers purchase themselves.
In aggregate, the Internet will enable us to do much faster and more
efficiently, something we already do pretty well -- making and selling
cars and trucks. It is revolutionizing how we do things, and how we think
about services that we can offer our customers. And that's why we're committed
to making GM the industry leader in the new e-world.
But, to be the global leader in the automotive world, the key is great
products. In 1999, we began to pick up the pace in our commitment to make
GM the industry leader in product innovation. A great example of this effort
is the new Opel/Vauxhall Zafira compact van, with its industry-leading
"Flex-7" seating system. This product has redefined the European van segment,
and forced competitors to change their future plans -- and, it's been sold
out since day one. Here in North America, we introduced, again to strong
reviews, four all-new large SUVs: the Chevrolet Suburban and Tahoe, and
GMC Yukon and Yukon XL. Not only do these products offer great improvements
from our customers' perspective -- from product design to better ride and
handling to improved interior space -- they also are about approximately
85 percent recyclable, and offer the highest fuel-economy rating in their
segment. Over the next year, we'll also introduce three exciting new "crossover"
vehicles that will help redefine traditional car and truck market segments
-- the Pontiac Aztek, Chevrolet Avalanche, and Buick Rendezvous.
Last fall, we offered a sneak preview of nine new GM concept vehicles
-- vehicles we then unveiled at this year's U.S. and European auto shows.
As a group, these, and other GM vehicles, have impressed enthusiasts and
experts alike, from Los Angeles to Geneva. Vehicles such as the Buick LaCrosse,
Hummer H2, Chevy SSR, and Cadillac Imaj are proof positive that GM's renewed
product focus is bearing fruit.
Finally, I'd like to highlight a number of recent financial actions
that demonstrate our intense focus on creating shareholder value.
In the spring of 1999, we completed the spin-off of Delphi Automotive
Systems as an independent company, opening up new growth opportunities
for Delphi and unlocking $9.3 billion of value for GM stockholders.
In January of this year, we reached an agreement to sell Hughes Electronics'
satellite manufacturing operations to The Boeing Company, a move designed
to enhance Hughes' focus in the fast-growing telecommunications arena,
and support GM's significant leadership in in-vehicle communications, such
as our OnStar system-the world's largest provider of in-vehicle safety,
security, and information services.
On February 1, GM announced a broad restructuring of its economic interest
in Hughes. GM has repurchased GM common stock in exchange for approximately
$9 billion of Class H stock. We also plan to contribute approximately $7
billion of Class H stock to our benefit plans in the US by the end of the
second quarter. Together, these actions significantly strengthen our balance
sheet and increase future earnings per share.
Also in 1999, GM repurchased shares worth $2.6 billion, bringing our
total share buy-backs since 1997 to $9 billion. In total -- through share
buybacks, spin-offs, and dividends -- General Motors has returned more
than $34 billion in capital to its shareholders since 1997, while at the
same time significantly strengthening our balance sheet and enhancing our
financial flexibility. I think I can speak for Jack and Harry when I say
the potential at General Motors has never been greater. The state of the
business at General Motors Corporation is strong -- and with our global
growth strategy, innovative products and services, focus on e-business
and the Internet, and, very importantly, a highly motivated work force,
we think we can make it much stronger in the future. Thank you. I'll now
turn the microphone back to Jack.
B.) G.M.’S VIEW ON FREE TRADE :
The evolving global economy involves a complex interrelationship of
trade and investment that becomes more important each day.
We have a long history of supporting open trade and investment policies
in the U.S. and around the world. In recent years, we were strong supporters
of both the North American Free Trade Agreement (NAFTA) and the Uruguay
Round of the General Agreement on Tariff and Trade (GATT), which created
the World Trade Organization (WTO).
Open trade and investment policies assure consumers access to the best
products at the best prices, and encourage the advancement of technology
and innovation. These policies lead to more rapid economic growth and creation
of high-wage jobs.
GM China President Rudolph Schlais and Tsinghua University Vice President Liang Youneng sign an agreement to establish the Delphi-Tsinghua Automotive Systems Institute in Beijing.
C.) GM REPORTS RECORD ANNUAL REVENUES OF $176.6 BILLION FOR 1999
REVENUE GROWTH DRIVES RECORD ANNUAL EARNINGS OF $8.53 PER SHARE :
(January 20, 2000)
DETROIT - Record calendar-year revenues and earnings were reported today by General Motors Corp. (NYSE: GM) on continued strong performance by its automotive operations and record earnings at General Motors Acceptance Corp. (GMAC).
-- GM's consolidated net sales and revenues totaled a record $176.6
billion in calendar-year 1999, an increase of 13.6 percent compared with
the prior year when revenues were $155.4 billion.
-- The revenue growth in 1999 helped drive a record $8.53 diluted earnings
per share of GM $1-2/3 par value common stock for the calendar year, compared
with $4.32 per share in 1998.
-- Income during 1999 totaled $5.6 billion, compared with $3.0 billion
in the prior year.
-- Excluding special items (see "Highlights" for details), 1999 income
totaled a record $5.7 billion, or $8.62 per share.
-- GM's global automotive operations generated record income of $5.0
billion in 1999, driven by GM North America's record income of $4.8 billion.
-- GMAC had record income totaling $1.5 billion in 1999.
-- GM's fourth-quarter-1999 revenues totaled $46.3 billion, compared
with $44.6 billion in 1998.
-- Income for the fourth quarter of 1999 totaled $1.1 billion, or $1.86
per share, compared with $1.7 billion, or $2.48 per share, in the prior-year
period.
"We're pleased that our financial performance remained on track even as we faced unceasing competitive pressures," said GM Chairman and Chief Executive Officer John F. Smith, Jr. "Record market demand in North America and Europe fueled increased sales of GM vehicles in these intensely competitive markets, while we continued to be affected by economic pressures in Latin America and the Asia-Pacific region. We're particularly gratified by the record performance of our automotive operations in North America, and GMAC," he said.
"As we close the books on the decade of the 90s, we feel we've taken a number of important steps to secure the future of General Motors," Smith said. "Very significant among these were our strong financial turnaround; the restructuring of the corporation with the separation of Delphi Automotive Systems, Hughes Defense, and Electronic Data Systems; the global integration of our automotive operations and expansion of our strategic global alliances; and our aggressive move into e-commerce, including the establishment of e-GM and GM TradeXchange.
"We enter the 21st century with a strong foundation," Smith said, "and we'll need to be even stronger as we face the tough challenges and boundless opportunities ahead of us. We are implementing our plans to make General Motors a faster, leaner, more innovative and customer-focused enterprise."
Cash, marketable securities, and assets of the Voluntary Employees' Beneficiary Association (VEBA) trust invested in short- term fixed-income securities totaled $14.4 billion at Dec. 31, 1999, compared with $13.1 billion at Dec. 31, 1998, and $16.7 billion at Sept. 30, 1999. These cash amounts exclude GM's financing and insurance operations.
"The strength of our cash position allowed us to complete our latest $4 billion stock-repurchase program, and take advantage of growth opportunities by expanding and strengthening our global automotive partnerships, along with funding our strong commitment to new products," Smith said.
During the fourth quarter of 1999, GM repurchased 23.3 million shares of its $1-2/3 par value common stock worth $1.6 billion. Since January 1997, GM has repurchased approximately 140 million shares of GM $1-2/3 par value common stock worth $9.0 billion, or more than 18 percent of the total shares outstanding.
The corporation's 1999-calendar-year return on net assets (RONA), excluding Hughes, was 14.0 percent. "RONA performance in 1999 was well above our 12.5-percent target," Smith said. "We are focused on further improving this performance to maintain our financial strength and provide a superior return to our shareholders."
Unless otherwise noted, corporate and sector data in the remainder of this release exclude special items (see "Highlights" for fourth-quarter and calendar-year data).
GM's 1999-calendar-year results were driven by strong year- over-year increases at GM North America (GMNA) and GMAC. After adjusting both years for the above-mentioned special items, and excluding the $1.5 billion strike-related unfavorable impact in 1998, GM North America posted a 42-percent improvement in income in 1999 over the prior year. In establishing its new calendar- year-record results, GMAC generated over 16 percent more income in 1999 than during the prior year.
"These strong GMNA and GMAC results and improvements in Latin America reflect our emphasis on reducing structural costs and growing the business. This performance offset reduced earnings and losses in other areas of our business, again demonstrating the advantages of operating as a globally integrated enterprise," Smith said.
GM's fourth-quarter-1999 results primarily reflected lower production and unfavorable mix due to the full-size utility truck startups in North America and lower production in Europe. In addition, all the automotive regions face continuing competitive pressures, while Hughes has incurred further costs associated with the rapid acceleration of its DIRECTV operations.
Following is a summary of income from GM's business segments in the 1999 fourth quarter and calendar year, compared with the prior-year period. These results are adjusted to exclude special items. Calendar-year-1998 results include the previously mentioned unfavorable strike impact. (see "Highlights" for additional information):
Adjusted Fourth Quarter and Calendar Year Income (Loss) ($ in Millions)
| Fourth | Quarter | Calendar | Year | |
| 1999 | 1998 | 1999 | 1998 | |
| GM North America | $1,013 | $1,663 | $4,565 | $1,715 |
| GM Europe | $30 | $146 | $423 | $463 |
| GM Latin America/
Africa/Mid-East |
$18 | ($161) | ($81) | ($124) |
| GM Asia Pacific | ($23) | ($116) | ($218) | ($146) |
| Other Automotive | $12 | ($5) | $35 | ($2) |
| Total Automotive | $1,050 | $1,527 | $4,724 | $1,906 |
| GMAC | $367 | $298 | $1,543 | $1,325 |
| Hughes | ($61) | $119 | ($105) | $272 |
| Other | ($101) | ($32) | ($476) | ($182) |
| Total Income
from Continuing Operations |
$1,255 | $1,912 | $5,686 | $3,321 |
GM Automotive's net margin was 2.8 percent in the fourth quarter of 1999, and 3.2 percent for the calendar year, compared with a net margin of 4.1 percent in the fourth quarter of 1998, and 1.5 percent for calendar-year 1998. GM North America's net margin was 3.4 percent in the fourth quarter of 1999, and 4.0 percent for the calendar year, compared with 5.8 percent in the fourth quarter of 1998 and 1.8 percent for the 1998 calendar year.
"Taking advantage of a record market, GM North America had a strong year," said GM President and Chief Operating Officer G. Richard Wagoner, Jr. "We're extremely pleased with the reaction of customers to our 14 new products, especially our new full-size pickups. In fact, these models contributed heavily to our all- time-high truck sales in 1999."
GM's global automotive operations were strengthened during 1999 with the enhancement and expansion of major partnerships and alliances. "We strengthened our alliances with Isuzu and Suzuki, forged a new partnership with Fuji Heavy Industries, and we recently announced that we will take full ownership of Saab. We also strengthened our collaboration with Toyota, and in December announced joint activities with Honda," Wagoner said.
"Our alliance strategy is an innovative way to achieve growth that takes advantage of unique opportunities in geographic regions, product segments, and technology. It's a big departure from the industry's historic 'go-it-alone' approach, but we think it's right for today's world," Wagoner said.
"While industry sales in Europe were at record levels once again, the competitive environment continued to heat up," Wagoner said. "GM Europe (GME) had record vehicle deliveries of 1,979,000 units in 1999, resulting in a market share of 9.8 percent, an improvement of 0.2 percentage points over 1998. And importantly, GME was profitable in all four quarters of 1999. For 2000, we're accelerating our focus on improving financial performance and growing sales with a strong array of new products," he said.
"Although the Latin America/Africa/Mid-East region continued to be affected by poor economic conditions, we were pleased that we moved into a profitable position in the fourth quarter of 1999, a notable turnaround from the prior-year period," Wagoner said. "Operating efficiencies continued to improve, and we strengthened our position in the region, growing our market share in 1999 by 0.9 percentage points to 16.6 percent."
The Asia-Pacific region significantly reduced its fourth- quarter losses compared with the prior-year period. "This was largely due to the strong startup of our Shanghai GM joint venture in China, and Holden's excellent sales and financial performance in Australia," Wagoner said. "We continue to better position ourselves for future growth in the region through expanded and enhanced strategic partnerships and alliances."
GMAC's improved financial performance in both the fourth quarter of 1999 and the calendar year was led by strong improvements at its core North American automotive-financing operations. For the calendar year, earnings from mortgage operations more than doubled from the previous year.
"GMAC's earnings for 1999 were a record and represented the fifth straight year of increasing earnings. While our North American auto finance and mortgage operations posted the biggest improvements, continued investments in insurance and international operations plus our recent expansion in commercial finance have paved the way for continued growth in overall financial-services income," Smith said.
Hughes Electronics' net sales and revenues increased 25 percent to $7.6 billion in 1999, from $6.1 billion in 1998. "The revenue increase was primarily driven by continued growth in the DIRECTV business, which added a record 1.6 million net new subscribers in 1999," Smith said. "DIRECTV continues to be the world's largest direct-to-home provider of digital entertainment programming with more than 9 million subscribers worldwide."
Hughes' net loss in 1999's fourth quarter and calendar year was primarily related to investments in growth opportunities, which are expected to result in increased revenues and profits in the future.
Hughes last week announced major changes in its corporate structure and business mix that are designed to sharply focus the company's resources and management attention on its high-growth entertainment, information, and business communications services. Actions included the sale of Hughes' satellite systems operations, and a strategy to discontinue certain wireless manufacturing activities and focus on wireless broadband opportunities.
In this news release, use of the words anticipate, expect, should, believe, plan, intensify, overcome and similar words are associated with forward-looking statements that are inherently subject to numerous risks and uncertainties. Accordingly, there can be no assurance that the results described in such forward- looking statements will be realized. The principal risk factors that may cause actual results to differ materially from those expressed in forward-looking statements contained in this news release are described in various documents filed by GM with the U.S. Securities and Exchange Commission, including GM's Current Reports on Form 8-K dated April 12, 1999, and filed on April 15, 1999, and April 21, 1999.
D.) GM ANNOUNCES OCTOBER MONTHLY ESTIMATE FOR 4TH QUARTER :
(November 8, 2000)
DETROIT -- General Motors Corp. today announced its October 2000 monthly production totaled 527,000 vehicles (261,000 cars and 266,000 trucks) in the United States, Canada and Mexico.
In October 1999, GM produced 533,000 vehicles (275,000 cars and 258,000 trucks).
In addition, the fourth-quarter estimate was decreased to 1,378,000 vehicles (674,000 cars and 704,000 trucks) from last month’s estimate of 1,390,000 vehicles (677,000 cars and 713,000 trucks).
A decrease in overtime is attributed to the revised production estimate.