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GM Shareholders Grill Wagoner Over Share

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GM Shareholders Grill Wagoner Over Share

Tuesday June 5, 6:53 pm ET

By Tom Krisher, AP Auto Writer

GM Shareholders Grill Chairman Rick Wagoner Over Declining Market Share, Future Plans

WILMINGTON, Del. (AP) -- Their proposals all were voted down, but that didn't stop several dissident General Motors Corp. shareholders from grilling Chairman Rick Wagoner over the company's market share decline and plans for the future at its annual meeting Tuesday.

Although Wagoner opened the 2 1/2-hour meeting with a speech touting progress the company has made in its turnaround plan and on advanced technology, several shareholders expressed dismay at the pace, saying GM was in a crisis and the board has not moved quickly enough to demand change.

"In my opinion, this company has turned around so many times we're going in circles. And that circle is leading us right down the drain," said shareholder James M. Dollinger, of Flint.

He said the shareholder proposals didn't stand a chance because the Detroit-based company is controlled by large banks, which make money off its debt offerings.

"That's where all the money's going. The banks have got to go," Dollinger said.

In all, 10 shareholder-backed proposals were voted down, including a bylaws change proposed by the Community of the Sisters of St. Dominic of Caldwell, N.J., that the company set goals to reduce greenhouse gas emissions and improve fuel efficiency.

Shareholder John Lauve, of Holly said time is running out for GM's comeback.

"The board has not demanded the necessary changes now," he said, pointing out that GM has lost 10 percentage points of market share in the past 10 years.

Since 2005, GM has cut $8 billion in annual costs, shed more than 34,000 hourly workers and rolled out more than 20 new models since November 2005 in an effort to regain sales lost to Asian competitors.

Although it made a $62 million net profit in the first quarter, the company still lost an adjusted $85 million on its North American operations. Last year it lost $2 billion, a vast improvement over a restated loss of $10.4 billion in 2005.

Wagoner, in his opening remarks, said the company's North American turnaround strategy is working faster than expected with cost cuts and new products to grow revenue. He said the company has made progress with the United Auto Workers in becoming more competitive, but more needs to be done in upcoming national contract talks this summer.

GM, he said, needs to "further reduce our still unsustainable health-care bill, which was a staggering $4.8 billion in 2006."

The company's top priorities for 2007 include staying focused on the turnaround, driving growth in emerging markets such as China, continuing to run GM as a global company and pursuing advanced propulsion at a rapid pace, he told about 100 people in attendance.

He announced that GM had awarded two lithium-ion battery development contracts to two companies for the Chevrolet Volt, a concept car that has a battery-powered electric motor that can run the car for up to 40 city miles on a single charge. Beyond that, a gasoline-powered, one-liter, three-cylinder engine can generate electricity to replenish the battery, giving the car a range of up to 640 miles. The battery system can be plugged into a home outlet for recharging.

After the meeting, Wagoner told reporters the company had targets for bringing the Volt to market, but he would not reveal them. He said they were moving as fast as possible on the car, but were not obsessed by any timeline.

"It's more can we keep our feet in front of us running every day," he said.

Wagoner also said:

-- A deal appears near between GM, Delphi Corp., its former parts operation, and the United Auto Workers union, but he also would not give a timeline. "My sense is it's coming together," he said. "I tend to think the number of issues is narrowing." Delphi and its investors have been seeking wage reductions from its unions as it tries to emerge from Chapter 11 bankruptcy protection.

-- GM sees no more major announcements on plant closures or job cuts in the U.S. as it seeks to further cut costs.

-- The company is "entertaining the possibility" of restructuring and selling its medium-duty truck business.

-- GM is talking with Malaysian automaker Proton about a partnership, although he said that was "more a possibility for us than a probability."

-- In response to a shareholder's question about DaimlerChrysler AG's decision to sell a majority stake in Chrysler Group to private equity firm Cerberus Capital Management LP, Wagoner said he didn't think GM would ever be taken private.

Among the nonbinding shareholder initiatives voted down were measures preventing board members from serving on more than two other boards of publicly traded companies; requiring a detailed reporting of political contributions made by the company; allowing shareholders with 10 percent or more of GM stock to call a special shareholders' meeting; creating a policy that 75 percent of future stock compensation given to senior executives be performance-based; and requiring executives to repay bonuses if the company later determines through an earnings restatement or other means that they did not reach their performance goals.

Two shareholder measures were approved at last year's meeting.

Shareholders also retained all 11 current board members. And they elected Erroll B. Davis Jr. and Kathryn V. Marinello to the board, bringing to total number of members to 13.

Davis is chancellor of the University System of Georgia and a former chairman and chief executive of Madison, Wis.-based Alliant Energy Corp. Marinello is president and CEO of Ceridian Corp.

Proponents of the greenhouse gas reduction goals argued that GM needs them to show investors that it is serious about curbing global warming, and that it needs to produce more fuel-efficient vehicles to survive as a company and stem its market share loss.

"We believe that the company can be an innovator and that we can bring Americans the safe, comfortable vehicles that they seek, and meet greenhouse gas reduction targets," said Miranda Anderson, an adviser to Ceres, a group of investors and environmental groups that had backed the measure.

Just under 26 percent of the voters were in favor of the proposal, which GM said was unnecessary because it has been working diligently to reduce emissions and improve fuel economy.

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I was there and so was Buickman (AKA: James Dollinger), he didn't see me, but I saw him. :smilewide:

hrmm so it would seeem the article says he was the one demanding results...

I wonder how long it will be till the share holders are silenced by awe about the new portfolio of vehicles...

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GM needs to go the same way as Chrysler. Have it go private get rid of Wagoneer and Lutz. Sell Saab, Hummer, rename saturn to oldsmobile

you have the wrong additude...

but to sell saab and hummer would be no better then to just close down oldsmobile... it would cost more money than anything...

saab and hummer both have no assets... nor do they have platforms to themselves...

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GM needs to go the same way as Chrysler. Have it go private get rid of Wagoneer and Lutz. Sell Saab, Hummer, rename saturn to oldsmobile

Are you out of your mind? What Wagoner and Lutz have been able to do is nothing short of amazing. I know you want to point to the fact that they're still not making a lot of money, but they've made huge gains. Not to mention they've reduced fleet sales and incentives, which if they hadn't done those things, they would have a lot more short-term revenue coming in, but they've made the smart choice for the long-term.

I'm curious, how exactly would GM benefit from your plan?

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GM needs to go the same way as Chrysler. Have it go private get rid of Wagoneer and Lutz. Sell Saab, Hummer, rename saturn to oldsmobile

OK -- I'm calling you on this one.

Tell us why you'd get rid of Wagoner (one 'e') and Lutz?

Tell us why you'd get rid of Hummer..........

Tell us why you'd rename Saturn to Oldsmobile.

I'd like to see detailed reasons -- not a one line answer.

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While I don't agree with everything that Mr. Wagoner does, I'm quite tired of Mr. Dollinger constantly slamming GM -- and Mr. Wagoner in particular.

Yes - GM has some real problems. Yes, GM needs to make a return on investment....but dear GOD -- look at what Mr. Wagoner inherited when he took the reigns.......moreover, look at the turnaround in terms of stemming the losses --and the product renaissance. (and yes, I know the other manufacturers are not standing still)

Personal thought? I think Mr. Dollinger will be genuinely upset when GM makes money.......no matter what happens, he's become a gadfly.........

This is not to say he's not a passionate kind of guy when it comes to GM.........I just think his motives are either:

a. -- misplaced

b. -- not what he leads one to believe.........

Edited by fbodfather
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