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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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) June 14, 2004
GENERAL MOTORS CORPORATION
| STATE OF DELAWARE | 38-0572515 | |
| (State or other jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
|
| 300 Renaissance Center, Detroit, Michigan | 48265-3000 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code (313) 556-5000
| ITEM 9. Regulation Disclosure | ||||||||
| SIGNATURES | ||||||||
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ITEM 9. Regulation Disclosure
General Motors Corporation (GM) issued the following press release and charts in connection with a meeting with securities analysts and investors, held in Detroit, Michigan on Monday, June 14, 2004.
# # #
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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.
| GENERAL MOTORS CORPORATION (Registrant) |
|||||
| Date: June 14, 2004 | By: | /s/PETER R. BIBLE. | |||
| (Peter R. Bible, Chief Accounting Officer) | |||||
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 1 |
Safe Harbor
In the presentation that follows and in related comments by General Motors management, our use of the words “expect,” “anticipate,” “estimate,” “forecast,” “objective,” “plan,” “goal,” “project,” “priorities/targets” and similar expressions is intended to identify forward looking statements.
While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors that are described In GM’s most recent report on SEC Form 10-K which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: changes in economic conditions, currency exchange rates or political stability; shortages of and price increases for fuel, labor strikes or work stoppages; market acceptance of the corporation’s new products; significant changes in the competitive environment; changes in laws, regulations and tax rates; and, the ability of the corporation to achieve reductions in cost and employment levels to realize production efficiencies and implement capital expenditures at levels and times planned by management.
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 2 |
Global Business Environment
Paul
Ballew
Executive Director,
Global Market and Industry Analysis
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 3 |
Global Economy in 2004-2005
Global economic recovery has accelerated, although some headwinds have developed
U.S. economy continues to grow briskly at 4-5%
European economies are slowly improving
Asia-Pacific region led by China continues to grow robustly
Latin America and Middle East economies continue to recover
Economic Environment: Not Ideal But Improving
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
Global Real GDP Growth Outlook
| ©2004 General Motors Corporation. All Rights. Reserved | 4 |
| 5% 4% 3% 2% 1% 0% 2.7 1.2 2.1 1.6 3.2 2.6 3.7 3.6 2.1 3.9 3.5 1.1 1.8 2.7 3.7 3.3 1990 2003 ’04 ’05 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 5 |
Automotive Industry Outlook
Global vehicle sales on pace for a record 61 million units
Sales on calendar-year-to-date basis are up a brisk 7%
Pricing remains challenging
— But in line with expectations and offset in part by mix
Sales outlook unchanged
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 6 |
Global Industry — May CYTD
|
Units (000’s) % Change 2003 vs. 2004 N/A Europe LAAM AP Total Global 8,329 8,924 1,610 7,180 26,043 3.7% 7.3% 15.1% 9.4% 7.1% |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 7 |
Global Industry Outlook
|
Units in Millions 2001 2002 2003 Forecast 2004 Global NA U.S. Europe LAAM AP 57.1 20.3 17.5 19.7 3.9 13.1 57.6 20.1 17.1 19.3 3.6 14.5 58.6 19.8 17.0 19.5 3.6 15.7 61.1 20.2 17.2 20.2 3.8 17.0 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 8 |
Global and Regional GM Share Performance May 2004 CYTD
|
GM Volume GM Share 2004 (000’s) $ Chg. vs. ’03 2004 % Pts. Chg. vs. ’03 Global NA Europe LAAM AP 3,679 2,209 842 271 358 7.4 3.5 8.6 24.6 19.6 14.1 26.5 9.4 16.8 5.0 0.0 (0.1) 0.1 1.3 0.4 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 9 |
Global New Vehicle Sales
|
Units in Millions Annual Growth of 2.9% for 2003-2010 2003: 59 Million Units 80 70 60 50 40 30 20 10 0 2010: 71 Million Units 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 10 |
Global New Vehicle Sales Revenue
|
$U.S. Billions, Nominal Industry Growth: CAGR 1980-2003 2003-2010 Revenue Unit Sales 6.3% 2.1% 6.4% 2.9% 2003: $1.3 Trillion 2010: $2.0 Trillion 2,000 1,500 1,000 500 0 1980 1985 1990 1995 2000 2005 2010 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 11 |
U.S. Vehicle Transaction Price — Industry Average
|
$28,000 $26,000 $24,000 $22,000 $20,000 $20,876 $21,962 $22,982 $23,589 $24,949 $25,799 $26,249 $27,023 1995 1996 1997 1998 1999 2000 2001 2002 2003 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 12 |
Global Industry Faces Some Headwinds
Legitimate headwinds exist and are causing some uncertainty in the medium term
— Need to put these in context and critically view their impact
Key risks are
— Higher interest rates
— Transitions to more sustainable growth rates are occurring in the two most important markets (U.S. & China)
— Higher fuel prices
Bottom Line: Headwinds are Present but Should Not Derail the Global Expansion
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 13 |
U.S. Fed Funds Rate
|
History Forecast Outlook is for a Return to More Normal Levels 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1990 2003 ’04 ’05 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 14 |
U.S. Vehicle Payment as a Percentage of Monthly Household Income
|
Despite Increases in Interest Rates, Vehicle Affordability is Expected to Remain Close to Record Levels 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% April 2004 = 6.26% Aug 2000 Aug 2001 Aug 2002 Aug 2003 Aug 2004 |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 15 |
U.S. Gasoline Prices
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$ Per Gallon $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 0 Nominal $ – Actual Nominal $ – Forecast Real 2004 $ – Actual Real 2004 $ – Forecast Forecast$/Gallon 2004 2005 Nominal Real 1.81 1.81 1.71 1.67 1919 2005 Sources: U.S. Energy Information Administration, General Motors |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 16 |
Change in the Price of Gasoline and Other Consumer Items Between 1982-1984 and April 2004
|
New Vehicles 37% Gasoline 52% Personal Care Products 55% Beer, Ale & Malt Beverages at Home 74% Meats 79% Food Away From Home 86% All Items 88% Fish & Seafood 93% Airline Fare 132% Physicians’ Services 178% Dental Services 204% Prescription Drugs & Medical Supplies 235% College Tuition & Fees 335% Tobacco & Smoking Products 373% 0% 50% 100% 150% 200% 250% 300% 350% 400% Source: U.S. Bureau of Labor Statistics |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 17 |
U.S. Gasoline Consumption as a Percentage of Disposable Personal Income
|
1980 Peak = 6.2% History: 1977 - 2003 Forecast: 2004 7% 6% 5% 4% 3% 2% 1% 0% 1997 2004 Forecast Source: U.S. Department of Energy, Oil and Gas Journal, Polk, U.S. Bureau of Economic Analysis, General Motors |
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 18 |
Summary on Interest Rate and Fuel Price Situations
A shift in monetary policy combined with higher energy prices will temper growth, however no reason to assume will derail the global expansion
Oil and gasoline markets have been hit by both supply and demand side disturbances
Although fuel prices have surged in the past few months, they remain low by historical standards, especially after fuel economy improvements are included
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 19 |
China: Industry Development
Growth is moderating after recent unsustainable surge
2003 vehicle
sales 4.6 Million units, up 35% y-o-y
— 2004 outlook 5.0 to 5.2 million units
Largest sales increases in 2003 were in Lower Medium and intermediate segments
Industry structure will change radically in the near-term
— Domestic automakers include more than 120 small companies
— Government is encouraging consolidation
— GM is well positioned as industry consolidates
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| 2004 GM Global Securities Analysts’ Conference | P. Ballew | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 20 |
GM’s Strategy
Focus remains on “getting the basics right”
— Cost, Quality, Product and Brands
Must continue to take advantage of growth opportunities
— Richer mix in U.S.
— Emerging markets
Adjust to current and future challenges
— Best in industry fuel economy
— New-term focus on improving internal combustion engine (e.g., Displacement on Demand)
— Push into new frontiers (e.g., Fuel Cells)
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 1 |
Safe Harbor
In the presentation that follows and in related comments by General Motors management, our use of the words “expect,” “anticipate,” “estimate,” “forecast,” “objective,” “plan,” “goal,” “project,” “priorities/targets” and similar expressions is intended to identify forward looking statements.
While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors that are described in GM’s most recent report on SEC Form 10-K which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: changes in economic conditions, currency exchange rates or political stability; shortages of and price increases for fuel, labor strikes or work stoppages; market acceptance of the corporation’s new products; significant changes in the competitive environment; changes in laws, regulations and tax rates; and, the ability of the corporation to achieve reductions in cost and employment levels to realize production efficiencies and implement capital expenditures at levels and times planned by management.
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 2 |
Global Business Update
John Devine
Vice Chairman & CFO
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 3 |
What Has Happened Since January?
Strong global market — U.S. performing about as expected
On-track to meet Q2 and CY net income targets
GMNA, GMAP on-track, GMLAAM above target, GME below target
GME cost reduction on-track, shortfall in revenue
GMAC set to beat target by wide margin
Other financial metrics, including cash flow and capital, are on-track
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 4 |
Agenda
Automotive Update by Region
GMAC
Interest Rates
$10 EPS
Report Card
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 5 |
|
Metric Status 2004 Key GMNA Metrics Market Share Net Income Material Cost Structural Cost Quality G G G G G |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 6 |
Cost Reduction Status — GMNA
Material cost reduction on target at 3.5%
Structural costs on target to decrease by $1.0 billion
— Performance improvements and decreased pension expense more than offset health care and labor economic increases
Continued strong reduction in non-scheduled manufacturing overtime
Continued trend of 4-5% net attrition (hourly and salary)
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 7 |
|
Actual Hours Per Vehicle GM Toyota Ford Honda DCX Nissan 50 45 40 35 30 25 2003 vs. 2002 Harbour Study — GMNA Total Hours Per Unit (Assembly, Powertrain, Stamping) 46.81 38.60 3.4% 46.52 37.42 7.8% 36.76 35.20 5.2% 31.90 32.09 7.1% 30.79 30.01 3.9% 30.25 28.09 4.4% 1998 1999 2000 2001 2002 2003 GM excludes medium duty. Honda, Nissan and Toyota data includes partial reporting of North American plants. |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 8 |
6 Year Average Hours Per Vehicle Improvement History
| Assembly 4.7% GM (0.4)% Ford 4.6% DCX 0.4% Toyota 1.1% Honda (0.4)% Nissan Stamping 5.0% GM 0.0% Ford 4.0% DCX (4.0)% Toyota (5.0)% Honda 4.0% Nissan Engine 6.2% GM (4.5)% Ford 4.2% DCX 1.4% Toyota 2.2% Honda Transmission 4.6% GM 1.1% Ford 3.0% DCX |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 9 |
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GM: 33% Reduction Problems Per Hundred 200 180 160 140 120 100 179 164 146 130 134 120 134 Toyota Toyota 101 1999 2000 2001 2002 2003 2004 J.D. Power Initial Quality |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 10 |
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Metric Status 2004 Key GME Metrics Market Share Net Income Material Cost Structural Cost Quality G R G G G |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 11 |
Status — GM Europe
First quarter results not at acceptable level
Good material cost performance, flat structural costs
Expected growth in revenue has not been achieved
— Price competition remains strong
— Mix has been unfavorable
— German Market challenges remain
Saab turnaround continues to make progress, but F/X remains a challenge
Expect to be in a net loss position in 2004 CY
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 12 |
New Astra
Most important new vehicle for GME (over 25% of volume)
Initial acceptance excellent
— Positive press comments
“Brillant New Astra... Better to drive than a Focus, classier than a Golf” — What Car? April 2004 (UK)
Very strong Astra demand
— Approximately 10,000 new Astras sold in Q1 2004, projecting sales of over 315,000 by the end of the year
— Over 147,000 orders received by end of May (116K sold orders)
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 13 |
|
3,500 3,000 2,500 2,000 1,500 1,000 500 0 28% Reduction in Capacity 2,950 Dec ’99 2,925 Dec ’01 2,655 Mar ’02 2,325 Jan ’03 2,125 Dec ’04 Manufacturing Performance Capacity Optimization |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 14 |
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100% 50% 0% 1999 2000 2001 2002 61% Improvement 2003 2004 Target Improvement of Delivery Quality Warranty Claims after 12 Months of Ownership |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 15 |
|
Metric Status Market Share Net Income G G 2004 Key GMAP Metrics |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 16 |
GMAP Strategy
Focus on broad-based growth in key markets (China, India, Korea, ASEAN, Australia)
Continue to build up our capability in China — Production, Engineering/Design, People
Grow/Improve GM Daewoo product portfolio
Strong joint venture/alliance partners
Improve profitability in Thailand, India and Korea
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 17 |
GM China Strategy
Grow share
— Leverage brands
— Adding product in new segments
Increase capacity
Leverage local engineering with global capability
Leverage GMDAT
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 18 |
GM’s Rapid Expansion in China
New investment to exceed $3B over three years
GM and its joint ventures to introduce nearly 20 new and upgraded products over the next three years
— Will also introduce a range of new engines and transmissions
Vehicle assembly capacity in China will double to 1.3M units by 2007
Local engineering and design capability to be upgraded
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 19 |
|
Units (000’s) 1,400 1,200 1,000 800 600 400 200 0 410 2003 2004 2005 2006 1,300 2007 Capacity on a 3 shift basis GM Capacity — China |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 20 |
|
Brand Segment Product Offerings Cadillac Buick Chevrolet Wuling Saab Opel Luxury Small/Medium Upper Medium/Large Mini Small/Medium Mini Luxury Medium CTS, STS, SRX, XLR Sail, Excelle Regal, GL8 Spark Aveo, Optra Sunshine, Yangguang City Breeze 9-3, 9-5 Vectra GM Product Portfolio — China |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 21 |
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Industry Volume (Millions) 5.0 4.0 3.0 2.0 1.0 0.0 China Industry GM Share 1.7 0.4% 1.9 1.2% 2.2 1.5% 2.5 2.5% 3.4 4.6% 4.6 8.3% GM Market Share 10% 8% 6% 4% 2% 0% 1998 1999 2000 2001 2002 2003 China Vehicle Sales |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 22 |
GM — Daewoo
Integral to GM overall product strategy
Tremendous growth opportunity
— Currently sold in North America, South America, Europe and Asia
Strong capabilities in engineering
Low cost manufacturing
Improved profitability
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 23 |
|
Metric Status Market Share Net Income G G 2004 Key GMLAAM Metrics |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 24 |
GMLAAM
On-track to beat 2004 CY net income target of ($200M) — ($100M)
Experiencing continued challenging economic conditions in Brazil, but have been able to reduce year-over-year losses
GM growing volume, share and profitability in Colombia, Venezuela, Ecuador and Chile
GM Argentina financially stable and gaining volume/share amid strong industry recovery
100% acquisition of Delta Motors will improve LAAM revenue and profitability
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 25 |
Agenda
Automotive Update by Region
GMAC
Interest Rates
$10 EPS
Report Card
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 26 |
|
$ Millions 3,000 2500 2000 1500 1000 500 $1,325 1998 $1,527 1999 $1,602 2000 $1,786 2001 $1,870 2002 $2,753 2003 Expect to Beat Target by Wide Margin >$2.0B Target 2004 Outlook GMAC Net Income |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 27 |
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Credit Loss Trends U.S. Off-Lease Residuals International Auto Finance Growth Insurance Loss Cost Trends Increase in Residential Mortgage Market Share G G G G G GMAC — Business Fundamentals |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 28 |
GMAC Outlook
Diversified portfolio of profitable businesses
Positioned well to handle interest rate increases
Business fundamentals remain favorable
Increase in fee-based income at auto finance operations
Expansion of insurance and mortgage operations internationally
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 29 |
Agenda
Automotive Update by Region
GMAC
Interest Rates
$10 EPS
Report Card
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 30 |
Interest Rates
Interest rate increase linked to strong recovery of U.S. economy
Consensus assumes interest rates will rise by 100 basis points or less, in both 2004 and 2005 CYs
— Included in current 2004 EPS guidance of $7.00 EPS
Earnings impact includes:
— Sales Allowances/Inventory DOWN
— Automotive Cash/Debt Portfolios DOWN
— GMAC DOWN
— Pension/OPEB UP
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 31 |
Agenda
Automotive Update by Region
GMAC
Interest Rates
$10 EPS
Report Card
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 32 |
|
Challenges Health care/pensions Pricing Strong competitive entries GME turnaround Opportunities GM product portfolio Growth in Asia-Pacific Accelerated cost performance Continued strong GMAC performance $10 EPS by 2006 CY Remains the goal Requires 2.5% automotive margins |
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 33 |
Agenda
Automotive Update by Region
GMAC
Interest Rates
$10 EPS
Report Card
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 34 |
2004 Priorities/Targets
Priorities
— $6.00 – $6.50 EPS* G $7.00 EPS*
— Operating cash flow of $5.0B G
— Grow share in all regions G
Regional/Sector Income Targets
— North America: $1,000 – $1,400M G
— Europe: $0 – $100M R
— LAAM: ($200M) – ($100M) G
— Asia-Pacific: $700 – $800M G
— GMAC: >$2,000M) G
Other Metrics
— Structural cost: >$500M reduction (Auto Ops.) G
— Capital spending of $7.0B G
— Material cost reduction: 3.5% GMNA & 3.0% GME G
*EPS excluding any special items; at current dilution levels
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| 2004 GM Global Securities Analysts’ Conference | J. Devine | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 35 |
Summary
Global industry sales remain strong
GM affirms Q2 guidance of $2.00 – $2.25 EPS and 2004 CY guidance of $7.00 EPS
— Strength at GMAC offsets challenges at GME
— Continued strong global cost performance
Impact of gas prices and interest rates appear manageable
Focus on $10 EPS by 2006 remains
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 1 |
Safe Harbor
In the presentation that follows and in related comments by General Motors management, our use of the words “expect,” “anticipate,” “estimate,” “forecast,” “objective,” “plan,” “goal,” “project,” “priorities/targets” and similar expressions is intended to identify forward looking statements.
While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors that are described in GM’s most recent report on SEC Form 10-K which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: changes in economic conditions, currency exchange rates or political stability; shortages of and price increases for fuel, labor strikes or work stoppages; market acceptance of the corporation’s new products; significant changes in the competitive environment; changes in laws, regulations and tax rates; and, the ability of the corporation to achieve reductions in cost and employment levels to realize production efficiencies and implement capital expenditures at levels and times planned by management.
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 2 |
World’s Best Powertrains
Tom Stephens
Group Vice President,
GM Powertrain
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 3 |
World’s Best Powertrains
Who we are
Why Powertrain
Competitive advantage
— To the customer
— To GM’s bottom line
Advanced technology and sustainability
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 4 |
World’s Best Powertrains
Who we are
Why Powertrain
Competitive advantage
— To the customer
— To GM’s bottom line
Advanced technology and sustainability
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 5 |
|
22 Engineering 34 Engine 10 Casting & Component 25 Transmission Who We Are... |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 6 |
Who We Are...
General Motors Powertrain
Global process leadership for:
— 91 facilities
— 14 countries
— Over 72,000 people
— 43,000 engines/day
— 40,000 transmissions/day
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 7 |
World’s Best Powertrains
Who we are
Why Powertrain
Competitive advantage
— To the customer
— To GM’s bottom line
Advanced technology and sustainability
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 8 |
Why Powertrain...
Revenue
— Option pricing
— Key reason for vehicle purchase
Cost
— 20% of total vehicle material cost
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 9 |
World’s Best Powertrains
Who we are
Why Powertrain
Competitive advantage
— To the customer
— To GM’s bottom line
Advanced technology and sustainability
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 10 |
Powertrain Offers a Competitive Advantage
To the customer
— Broad portfolio
— Quality
— Fuel economy
— Performance
To GM’s bottom line
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 11 |
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1% Image 20-30% High-Feature 70-80% High-Value Advantage to the Customer... Broad Global Product Portfolio GM Powertrain Product Strategy |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 12 |
Advantage
to the Customer...
Broad Global Product Portfolio
Feature content and performance perceived as unchallenged by the competition
Customers will aspire to buy GM vehicles, regardless of affordability, because of these powertrains
1% Image
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 13 |
Advantage
to the Customer...
Broad Global Product Portfolio
Feature content will be equal to or better than any competition in segment
Functionality and quality will be at benchmark levels
Cost will be competitive
20-30% High-Feature
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 14 |
Advantage
to the Customer...
Broad Global Product Portfolio
Performance, fuel economy, NVH and packaging equal to or better than segment competitive norms
Quality will be at benchmark levels
Significant cost advantage
70-80% High-Value
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 15 |
Advantage to the
Customer...
Quality — J.D. Power IQS2 — Car Powertrains
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Total PPH 35 30 25 20 15 10 5 0 1st Place Three Years in a Row GMPT Toyota Ford Chrysler Honda 1998 1999 2000 2001 2002 2003 2004 Model Year |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 16 |
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Total PPH 45 40 35 30 25 20 15 10 5 0 2nd Place and Reduced Gap to Toyota by 58% in 2004 GMPT Toyota Ford Chrysler 1998 1999 2000 2001 2002 2003 2004 Model Year Advantage to the Customer... Quality — J.D. Power IQS2 — Truck Powertrains |
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| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 17 |
Advantage to the
Customer...
Fuel Economy Leadership
EPA reports:
— GM trucks lead in 50 out of 75 models
— GM cars lead in 40 out of 62 models
More segment-leading vehicles than any other manufacturer
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 18 |
Advantage to the
Customer...
Performance — Gasoline Engine Trends
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HP/L 70 65 60 55 50 45 40 35 30 Specific Horsepower — Cars 1975 1980 1985 1990 1995 2000 2005 Model Year Source: 2004 EPA Trend Report for Cars |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 19 |
Advantage to the
Customer...
Performance
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Establish future capability of ALL existing global engine families Specific Power (HP/L) 130 120 110 100 90 80 70 60 50 40 30 20 V6 and V8s Design “Envelope” 2V; OHV LS6 V8 4V; OHC 4V; OHC, VVT/VVL Auto Trans Guideline 2,500 3,500 4,500 5,500 6,500 7,500 8,500 Engine Speed @ Peak Power (rpm) |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 20 |
Powertrain Offers a Competitive Advantage
To the customer
To GM’s bottom line
— Revenue optimization
— Core competencies
— Productivity
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 21 |
Advantage
to GM’s Bottom Line...
Revenue — Option Pricing
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Customer Performance Attribute 6.0L High Output 6.0L Mid-Level 6.0L Base ~340,000 Units/yr 5.3L ~860,000 Units/yr 4.8L ~180,000 Units/yr Full Size Trucks & SUVs Cost |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 22 |
Advantage to GM’s Bottom Line...
Core Competencies — Electronic Controls
Powertrain Electronic Control System
System architecture specified in-house
Changes the balance of power with suppliers
Turns the electronic control system hardware into a commodity
Enables catalytic converter noble metal thrifting
Starting to leverage globally
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 23 |
Advantage to GM’s Bottom Line...
Productivity
North American Harbour Report 2004
5.2% improvement in engine productivity
— Romulus — most productive V-8 plant in N. America
— Overtook Honda for 2nd place
— Closed gap to Toyota by 26%
— Parity to Toyota at comparable mix and volume
6.5% improvement in transmission productivity
— Toledo — most productive plant in N. America five consecutive years
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| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 24 |
Advantage
to GM’s Bottom Line...
Partnership With Ford on 6-Speed FWD Transmission
Jointly designed, engineered and tested
$720M total investment
— $350M GM, $370M Ford
Economies of scale
Excellent opportunity to provide a great product while cutting significant cost
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 25 |
World’s Best Powertrains
Who we are
Why Powertrain
Competitive advantage
— To the customer
— To GM’s bottom line
Advanced technology and sustainability
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 26 |
Advanced
Technology and Sustainability...
GM Technology Strategy
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Reduced Vehicle Emissions Increased Vehicle Fuel Economy Today Incremental Internal Combustion Engine and Transmission Improvements Near-Term Hybrid Electric Vehicles Mid-Term Hydrogen Fuel Cell Hydrogen Infrastructure Long-Term |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 27 |
Advanced
Technology and Sustainability...
Gasoline Engine Technology
Higher levels of fuel economy, power and torque
Required power density of 60 hp/liter-naturally aspirated and 100 hp/liter turbocharged
Spark ignition direct-injection (SIDI) gasoline engines
Cam phasers and variable induction tuning
OHV
— DOD for V-6/V-8 engines
— Three valves per cylinder
DOHC 4V
— Two-step valvetrain
— Port deactivation
Turbo/supercharging
By 2006, GM will have manufactured more than 1 million engines featuring port deactivation
By 2007, GM will equip more than 2.5 million engines a year with variable valve timing
By 2008, GM will equip up to 2 million vehicles annually with Displacement on Demand
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| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 28 |
Advanced
Technology and Sustainability...
Gasoline Engine Technology
Emission reductions
Advanced control system algorithms
Improved combustion
Close couple catalytic converters
Exhaust manifold integrated in the cylinder head
Active intake manifold on OHV engines
Turbocharger integrated in the exhaust manifold
E85 alternative fuel
Since 1960, GM has reduced NOx, CO and HC emissions by more than 96%
Driving a Hummer H2 for 3,000 miles emits less NOx, HC than operating a snowmobile for 1 hour
GM produces more than one-third of all E85 flexible fuel vehicles on the road in the U.S.
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| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 29 |
Advanced
Technology and Sustainability...
Diesel Engine Technology
Increased power and torque with reduced emissions and NVH
Power density > 80 hp/liter
— Increased maximum cylinder pressure (P-max)
— Reduced compression ratio
— Common rail fuel system improvements
High pressure
Pilot/post injection
Advanced turbocharging systems
GM produces 1.9M diesels annually on 25 models globally
GM heavy duty diesel pickup market share increased from 2% to 29% with Duramax in 30 months
Starting in 2006, GM Daewoo will increase 1.5/2.0L diesel capacity by 250,000 units/year
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 30 |
Advanced
Technology and Sustainability...
Diesel Engine Technology
Emission reductions — especially particulates and NOx
Euro IV and beyond
— Low temperature combustion for NOx reduction
— Diesel particulate filter
— NOx aftertreatment (traps/catalyst)
First OEM to meet Euro IV emissions requirements with 2003 Opel Astra 1.7L Circle L
The 2004 Duramax diesel emits 40% less NOx and 10% less particulate emissions
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 31 |
Advanced
Technology and Sustainability...
Transmission Technology
Planetary stepped gear automatics for improved performance and fuel economy
6-speed families (FWD and RWD)
Stepped gear manual transmissions for improved fuel economy
Manual transmission automated (MTA)
Dual clutch transmission (DCT)
GM will produce nearly 1 Million 6-speed transmissions annually by 2008
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 32 |
Advanced
Technology and Sustainability...
GM Technology Strategy
|
Reduced Vehicle Emissions Increased Vehicle Fuel Economy Today Incremental Internal Combustion Engine and Transmission Improvements Near-Term Hybrid Electric Vehicles Mid-Term Hydrogen Infrastructure Long-Term |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
Broadest portfolio of hybrid systems in the industry
| ©2004 General Motors Corporation. All Rights. Reserved | 33 |
Advanced
Technology and Sustainability...
GM Hybrid Portfolio Evolution
2003 GM Allison Hybrid Bus System
2003/2004 FAS Hybrid Full-Size Truck
2006 BAS/Hybrid VUE
2007 BAS/Hybrid Malibu
2007 AHS II Full-Size SUV
2008 AHS II Full-Size Truck
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 34 |
Advanced
Technology and Sustainability...
GM Allison EP 40/50
Hybird System
GM Hybird Bus Features
Two 100kW Motors
588-volt NiMH batteries
Benefits
Up to 60% fuel economy
Reduces emissions by more than 90%
Operation sound levels equal to cars
50% faster acceleration
Extended brake, engine oil and transmission oil life
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| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 35 |
Advanced
Technology and Sustainability...
Flywheel Alternator Starter
PHT Features
14 kW motor
42- and 12-volt lead-acid batteries
Benefits
10-12% fuel economy improvement
Highest city fuel economy of any 2004 full-size truck
Uncompromised hauling/towing capability
First production hybrid build in North America
First 120-volt AC outlets in cab and pickup bed
Assembled on main line at Ft. Wayne Assembly
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 36 |
Advanced
Technology and Sustainability...
Belt Alternator Starter
BAS Features
7kW motor replaces alternator
42- and 12-volt batteries
Benefits
12-15% fuel economy improvement
Lowest-cost hybrid solution
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 37 |
Advanced
Technology and Sustainability...
Advnaced Hybrid System (AHS) II
AHS II Features
Based on GM hybrid system for buses
Two 30kW motors
300-volt battery
Benefits
25-35% fuel economy improvement
Uncompromised performance and trailering/towing capability
Scalable architecture
Future industry standard in hybrid architectures
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 38 |
Advanced
Technology and Sustainability...
GM Technology Strategy
|
Reduced Vehicle Emissions Increased Vehicle Fuel Economy Today Incremental Internal Combustion Engine and Transmission Improvements Near-Term Hybrid Electric Vehicles Mid-Term Hydrogen Fuel Cell Hydrogen Infrastructure Long-Term |
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 39 |
Advanced
Technology and Sustainability...
Fuel Cells — Reality, Not
Hype
Best chance to be competitive in high volume with today’s internal combustion engine
Substantial reductions in vehicle exhaust and greenhouse gas emissions
Energy security
Geopolitical stability
Sustainable economic growth
Goal is to be the first company to profitably sell 1 million fuel cell vehicles
Table of Contents
| 2004 GM Global Securities Analysts’ Conference | T. Stephens | 06/14/04 |
| ©2004 General Motors Corporation. All Rights. Reserved | 40 |
World’s Best Powertrains
Powertrain provides GM a competitive advantage globally
Advantage is sustainable through our:
— In-house powertrain core competencies
— Product strategy
— Advanced technology strategy