Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 18, 2008
GENERAL MOTORS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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1-43
(Commission File Number) |
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DELAWARE
(State or other jurisdiction of
incorporation) |
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38-0572515
(I.R.S. Employer
Identification No.) |
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300 Renaissance Center, Detroit, Michigan
(Address of Principal Executive Offices)
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48265-3000
(Zip Code) |
(313) 556-5000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17-CFR 240.14a-12) |
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
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ITEM 7.01 REGULATION FD DISCLOSURE |
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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SIGNATURES |
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INDEX TO EXHIBITS |
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| EXHIBIT 99.1 |
Materials distributed to certain members of the U.S. government
Table of Contents
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| ITEM 7.01 |
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REGULATION FD DISCLOSURE |
On Tuesday November 18, 2008, General Motors Corporation (GM) distributed to certain members of the
U.S. government materials related to the testimony by G. Richard Wagoner, Jr., GM Chairman and
Chief Executive Officer, on Tuesday November 18, 2008 at the Senate Banking Committee and on
Wednesday, November 19, 2008, at the House Committee on Financial Services. The materials are
attached as Exhibit 99.1.
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| ITEM 9.01 |
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FINANCIAL STATEMENTS AND EXHIBITS |
EXHIBITS
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| Exhibits |
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Description |
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Method of Filing |
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Exhibit 99.1
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Materials distributed to
certain members of the
U.S. government
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Attached as Exhibit |
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GENERAL MOTORS CORPORATION
(Registrant)
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| Date: November 18, 2008 |
By: |
/s/ NICK S. CYPRUS
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(Nick S. Cyprus, Controller and |
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Chief Accounting Officer) |
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Exhibit 99.1
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The Case for Federal
Support for GM and the
U.S. Automotive Industry
The Case for Federal
Support for GM and the
U.S. Automotive Industry
November 2008
November 2008
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| Forward Looking Statements In this presentation and in related comments by our management,
our use of the words “expect,” “anticipate,” “estimate,” “goal,” “target,” “believe,”
“improve,” “intend,” “potential,” “continue,” “designed,” “opportunity,” “risk,” “may,”
“would,” “could,” “should,” “project,” “projected,” “positioned” or similar expressions is
intended to identify forward-looking statements that represent our current judgment about
possible future events. We believe these judgments are reasonable, but these statements
are not guarantees of any events or financial results, and our actual results may differ
materially due to a variety of important factors. The most recent reports on SEC Forms
10-K, 10-Q and 8-K filed by us or GMAC provide information about these and other factors,
which may be revised or supplemented in future reports to the SEC on those forms. Unless
specifically required by law, we assume no obligation
to update or revise these
forward-looking statements to reflect new events or circumstances. |
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Overview
GM has taken far-reaching actions over the last several years to
restructure, be more competitive, and position its U.S. business for
future viability and success
Dramatic cost reductions
Excellent product execution
Significant technology advancements
However, the credit crisis is overwhelming operating plans --
weakening U.S. vehicle market and closing off financial market
funding
Wall Street crisis has moved to the real economy -- "Main Street"
Bankruptcy filing would be catastrophic for the nation; would have
massive and far-reaching systemic economic and social costs
GM and U.S. automotive industry require immediate liquidity support
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GM Has Taken Bold Actions to
Achieve Competitiveness
Reduced structural cost by $9 billion from 2005-2007 (down 22%) with plans for
further reductions of $5 to $6 billion by 2011 (down ~35%)
Rightsized manufacturing capacity: From year-end 2004 to year-end 2007, GM
removed 1.3 million units of assembly capacity (24% net reduction)
Further rightsizing planned with reduction of 0.7 million units by year-end 2010 (total
net reduction of 36%)
More than 60% of remaining capacity at year-end 2010 will be dedicated to fuel
efficient cars and crossovers
Streamlined U.S. operations: Total headcount reduced from 177,000 in 2002 to
93,000 today (47% reduction)
2007 UAW Hourly Labor Agreement provides basis for competitive manufacturing
base in U.S. by 2010
Historic agreement with UAW to fund retiree health care obligations with
independent VEBA trust, eliminating majority of risk related to U.S. retiree
healthcare starting in 2010
GM leads in manufacturing productivity in 11 out of the 20 North America
segments in which it competes (2008 Harbour Report)
GM also has 5 of the top 10 best rated engine plants in North America, and the #1
transmission plant, all located in the U.S.
Cost Competitiveness & Productivity in North America
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GM Has Taken Bold Actions to
Achieve Competitiveness (continued)
Commitment to Product Excellence broadly recognized
North America Car of the Year: Chevrolet Malibu and Saturn Aura
Motor Trend Car of the Year: Cadillac CTS
European Car of the Year: Opel Insignia
Green Car of the Year (LA Auto Show): 2-Mode Hybrid Chevrolet Tahoe
11 of last 13 U.S. launches have been cars or crossovers
J. D. Power Initial Quality Survey: In 2008, GM had more segment leaders than Toyota
or Honda, and GM has improved overall survey performance by 25% in last 5 years
Reduced number of warranty repairs by 40% over the last 5 years, and are on track in
2008 to achieve a further 15% reduction vs. 2007 levels
Growing leadership position in fuel economy and advanced propulsion
technologies
20 GM vehicles with EPA highway fuel economy of 30 mpg or better (most of any
manufacturer, domestic or import)
World leader in bio-fuel vehicles with over 3 million FlexFuel vehicles on U.S. roads
today, with commitment to reach 50% of annual GM volume by 2012
6 hybrids in U.S. today, and 2 more by year-end 2008 (most hybrid models of any
automaker)
Largest hydrogen fuel cell vehicle test fleet in the world
Chevrolet Volt (E-REV) production on schedule to begin in 2010
Product & Technology Excellence
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Rapid Decline in U.S. Consumer Confidence Due to
Credit Crisis, Leading to Low Industry Vehicle Sales
Falling U.S. home prices, mounting foreclosures and subsequent
credit/financial crisis led to dramatic decline in consumer confidence
October U.S. auto sales fell to levels not seen in more than 25 years
and, after adjusting for population, the lowest levels since World War II
2005 2006 2007 Jan Feb Mar Apr May Jun Jul Aug Sep Oct
U.S. SAAR 17.5 17.1 16.5 15.8 15.7 15.4 14.8 14.6 14.1 12.7 14 12.8 10.9
Consumer Confidence 88.6 87.3 85.6 82 78.4 70.8 69.5 62.8 59.8 56.4 61.2 63 70.3 57.6
U.S. Vehicle Annual Selling Rate
(Seasonally Adjusted, "SAAR")
Units, millions
Consumer Confidence Index
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Most Difficult Business and
Credit Environment in 70 Years
Housing price decline in U.S. and Europe precipitated financial
turmoil which has spilled over to the broader global economy,
leading to widespread uncertainty and volatility
U.S. economic downturn, declining employment, falling real income
Worst financial/credit crisis in more than 70 years impacts auto
business from all sides
Consumer and dealer financing are severely restricted
Suppliers under increasing pressure as volumes decline
Capital markets are essentially closed to GM and suppliers
Asset sales challenged because buyers also cannot find financing
Coordinated global government measures are welcomed and have
had some effect, but credit markets are far from stabilized and
measures have not yet helped the real economy ("Main Street")
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U.S. Auto Industry Is
Significant Contributor to U.S. Economy
Directly employs nearly 240,000 people
Provides healthcare to 2 million Americans and pension benefits to
775,000 retirees and spouses
Supports another 5 million jobs at dealers, parts suppliers and
service providers
Comprises nearly 4% of U.S. GDP
More than $225 billion invested in U.S. over last 2 decades,
including $10 billion in 2007 alone
$12 billion spent annually in U.S. on R&D, exceeding aerospace,
medical equipment and communications
Purchased $156 billion in U.S. auto parts in 2007, supporting jobs in
all 50 states
Largest purchaser of U.S. steel, aluminum, iron, copper, plastics,
rubber and electronic chips
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Massive Employment Impact
from Detroit 3 Collapse
Source: Center for Automotive Research Memorandum: The Impact on the U.S. Economy of a
Major Contraction of the Detroit Three Automakers, Nov. 4, 2008
Direct Employment: Jobs at Detroit 3 carmakers
Supplier Employment: Jobs at companies that sell commodities, products or
services directly or indirectly to Detroit 3 carmakers
Indirect Employment: Expenditure related effects in general economy,
representing loss of economic activity due to reduced
spending of employees of Detroit 3 and their suppliers
2009 2010 2011 2009 2010 2011
Detroit 3 Reduction 100% 100% 100% 100% 50% 50%
Direct Employment -239,341 -239,341 -205,611 -239,341 -119,671 -119,671
Supplier Employment -973,969 -795,223 -544,598 -795,371 -491,719 -311,488
Indirect Employment -1,738,034 -1,427,452 -1,021,354 -1,427,663 -886,345 -574,434
Total Employment -2,951,344 -2,462,016 -1,771,563 -2,462,375 -1,497,735 -1,005,593
Full Collapse: Detroit 3 Cease
Manufacturing In 2009
Partial Collapse: 50%
Reduction By Detroit 3
(1)
(1) Assumes supplier disruptions would initially
shut down all Detroit 3 carmakers
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Chapter 11 Is Not a Good Idea
for an Automobile Manufacturer
Successful Chapter 11 filing would require both preservation of
revenue (especially in a high fixed cost industry like the auto industry)
and successful financing while in bankruptcy
Filing would precipitate massive and rapid desertion by customers
Automobiles are the second largest purchase for most individuals, and
purchase decisions are impacted by consideration of warranty, service,
parts and residual value
Customers have other options: a June 2008 survey by CNW Research
indicated that ~80% of customers would not purchase a vehicle from a
bankrupt manufacturer
In today's credit market, financing while in bankruptcy would be very
difficult - especially if the company was not able to protect its
revenue base
Significant negative effects on U.S. automotive industry, broader
economy and global credit markets
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GM Taking Significant Actions in 2008 and 2009
to Generate and Preserve Cash Through Downturn
In light of ongoing global credit crisis, GM has planned conservatively and is
expecting U.S. industry volumes significantly below trend for several years
In July 2008, GM took difficult actions to generate and preserve cash through
2009, announcing a combined $15 billion of operating and other actions that
relied mostly on "self help"
$4 billion of North America structural cost, including idling truck and SUV
assembly plants and the elimination of executive bonuses
$2 billion from working capital by slashing inventories
$1.5 billion reduction in capital spending
$2.5 billion by suspending the dividend and deferring payments to UAW VEBA
$5 billion of asset sales and capital markets activity (to date, unable to execute)
GM recently announced further tough operating actions to preserve an
additional $5 billion through 2009. Actions include cutting capital spending by
delaying certain vehicle launches, taking out more North America structural
cost and further reducing salaried headcount
Importantly, GM has protected or increased spending for critical advanced
technology and fuel economy programs (Chevrolet Volt, Chevrolet Cruze)
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GM and Industry Need Liquidity Bridge
to Cover Expenses Through Downturn
GM needs federal funding as a bridge for engineering and
technology spending, capital spending and operating requirements
that cannot be covered in the current depressed industry conditions
Engineering and Technology Spending
Research for fuel economy and safety technologies, advanced
batteries, and telematics developments
Development of new vehicle models and powertrains, updates to
current models
Capital Spending
Machinery and equipment investments for new products
Modification of infrastructure; upgrading infrastructure, information
technology
Operating Requirements
Paying suppliers for production parts, components and materials
Paying wages, salaries and benefits of workers
Taxes
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GM Is Executing Its Plan to Build
a Winning Auto Company for the Long-Term
GM is building a winning auto company for the long-term
Using its global scale and scope to bring products that consumers want to every market
GM competes in with industry-leading quality, safety, fuel economy and design,
including the U.S. launch of the new compact Chevrolet Cruze in 2010
Landmark agreement with UAW provides new operating flexibility today, competitive
U.S. hourly labor costs in 2010, and caps GM's hourly retiree healthcare liability
GM building the best cars in its 100-year history, with a resurgence in quality and
styling across its entire product portfolio
Targeting fuel economy leadership in every class of vehicle we introduce
Cars and crossovers comprise 11 of last 13 U.S. launches, and 14 of next 15
Success of recent launches such as Cadillac CTS, Chevrolet Malibu and Buick Enclave
provide confidence in product plan
GM committed to pursuing industry leadership in fuel economy and advanced
vehicle technology
20 GM vehicles with EPA highway fuel economy of 30 mpg or better (most of any
manufacturer, domestic or import)
World leader in bio-fuel vehicles with over 3 million FlexFuel vehicles on U.S. roads
today, with commitment to reach 50% of annual GM volume by 2012
6 hybrids in U.S. today, 2 more by year-end (most hybrid models of any automaker)
Largest hydrogen fuel cell vehicle test fleet in the world
Chevrolet Volt (E-REV) production on schedule to begin in 2010
GM is reinventing the automobile - and the company
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