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GM CEO Wagoner to Announce Company Actions to Align Business To Current Market Conditions

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GM CEO Wagoner to Announce Company Actions to Align Business To Current Market Conditions

Detroit, Mich. (NYSE: GM) General Motors Chairman and CEO Rick Wagoner will hold a news conference on Tuesday, July 15 to discuss actions the company is taking to align the business to current market conditions.

The press conference will begin at 9:00 a.m. EDT in the Jefferson Room of the Renaissance Conference Center on the second level of GM global headquarters in Detroit. The satellite feed for the press conference is:

Satellite: AMC 16

Transponder: 23

Downlink: 12160 Vertical

Audios: 6.2/6.8

Analog, Ku Band

A listen and Q&A line will be available for media:

U.S.: 800.288.8974

Outside U.S.: 612.332.0335

Ask for the GM media briefing

Preceding the press briefing will be an employee broadcast that will also be made available to the media. The employee broadcast will begin at 8:30 am EDT. Wagoner will address employees for approximately 20 minutes. Satellite access to the briefing is available at the coordinates listed above.

Telephone access (listen only) for the media will be available at:

U.S.: 800.288.8974

Outside U.S.: 612.332.0335

Ask for the GM media briefing

A conference call for financial analysts and the media will follow at 11:15 a.m. The call will be hosted by Wagoner along with other members of the GM senior leadership team including COO and President Fritz Henderson, CFO Ray Young and Vice Chairman and Head of Global Product Development Bob Lutz. The call will begin with remarks followed by a question-and-answer session.

To participate in North America, dial 800.786.6596. To participate outside North America, dial 212.231.2906. The conference call will also be webcast live on GM's Investor website http://investor.gm.com in the Calendar/Events section. The webcast and charts will available via a hot link at GM Media OnLine (http://media.gm.com).

Archive: A taped replay of the call will be made available from 1:15 p.m. EDT, July 15, 2008, until 1:15 p.m. EDT, July 17, 2008. Â In North America, please dial 800.633.8284 (or 402.977.9140 for access outside North America) and enter reservation number 21388602 for access to the taped replay.


Dan Flores

GM News Relations

313.665.4629 (office)

313.418.2374 (mobile)


Reneé Rashid-Merem

GM Financial Communications

313.665.3128 (office)

586-899-0971 (mobile)


Technical/broadcast questions:

Len Marsico

GM Global Communications Operations

313.665.3177 (office)

313.610.2091 (mobile)


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Here is the precall news:

DETROIT (Reuters) - General Motors Corp (NYSE:GM - News) said on Tuesday it would cut salaried employment costs by 20 percent, sell up to $4 billion of assets and borrow at least $2 billion in a bid to bolster its liquidity by $15 billion through 2009. GM also said it would suspend its common stock dividend in a restructuring driven by high fuel prices, a shift away from trucks and SUVs, and the lowest U.S. industrywide auto sales in a decade.

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Here is the Wall Street Journal:

Slammed by a deep decline in auto sales, General Motors Corp. Tuesday said it will cut salaried job costs, speed factory closings and suspend its dividend to weather the downturn.

The company said it also plans to add $15 billion in liquidity through 2009, even as it said that it has "ample liquidity" to meet its 2008 funding requirements. The additions to liquidity will be achieved through cost cuts, as well as asset sales and capital market activities.

Cost-cutting steps include cutting more salaried positions and eliminating health-care coverage for U.S. salaried retirees over 65 at the start of next year.

"We are responding aggressively to the challenges of today's U.S. auto market," GM Chairman and CEO Rick Wagoner said in a prepared statement. "We will continue to take the steps necessary to align our business structure with the lower vehicle sales volumes and shifts in sales mix. We remain committed to bringing to market great products that target changing consumer preferences for more fuel-efficient vehicles."

The announcements followed weeks of rising uncertainty for the No. 1 U.S. auto maker by vehicle sales. The company's stock price has plunged to lows last seen a half-century ago. GM's market capitalization has dwindled to $5.31 billion, about 60% lower than the value of the company at the beginning of the year.

GM and other auto makers have been hurt by a big drop in U.S. vehicle sales this year and a shift in consumer preferences away from trucks and sport-utility vehicles to small cars and other more fuel-efficient models.

GM is moving to reduce the company's heavy reliance on trucks for most of its sales in North America, and ramp up production of cars and other fuel-efficient vehicles as quickly as possible. GM was expected to announce it is eliminating thousands of salaried jobs; a large number could hit the groups that develop pickup trucks and SUVs.

Mr. Wagoner in June announced a plan to close four truck and SUV plants by 2010. In recent weeks, executives and the board discussed possible further steps, such as closing or downsizing engine, transmission and stamping plants that provided parts for trucks, people familiar with the matter said.

To raise more cash, the board has discussed issuing more equity and selling off the remaining 49% stake GM owns in GMAC LLC, these people said. GM could even consider separating its foreign subsidiaries into an isolated unit, and using that as collateral for additional financing or as a way to sell more equity, David Cole, president of the Center for Automotive Research in Ann Arbor, Mich., said last week. Mr. Cole is known to have close ties to GM.

GM had $24 billion as of March 31, but analysts expect that sum fell by as much as $5 billion in the second quarter alone. Mr. Wagoner has assured investors the company isn't interested in bankruptcy protection, and said the company has enough liquidity to operate for the next six months.

GM is approaching the market with "very conservative" estimates for its market share and industry sales, one person said. GM had 21.3% of the U.S. market in June, and sees total U.S. vehicle sales falling to about 15 million this year. GM entered the year expecting a 16-million-vehicle market, but demand hasn't been as strong as initially thought.

Mr. Wagoner has been working in recent years on expanding the company's presence in emerging markets and beefing up its technology arsenal to better battle Toyota Motor Corp. for industry leadership. The 55-year-old chief executive has won the backing of GM's board of directors, despite posting three consecutive years of massive financial losses and a considerable slide in U.S. market share. Three years ago, he installed a plan under which the company could save $9 billion in annual structural costs by curtailing the company's manufacturing base. He coupled that plan with a restructured United Auto Workers deal that should cut another $4 billion to $5 billion in costs.

People close to Mr. Wagoner say his latest revisions could allow GM to stay on track to meet an internal profit target set for 2010.

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For years the dividend was good and people bought the stock for it. Without a dividend now, the stock is going to drop even more. It may go up today, but I wouldn't be surprised to see around $7 in a couple months.

This plan sounds like the same stuff they have been doing the last few years. It shows GM knows how to cut costs, doesn't show they know how to make profit selling small cars. Not increasing R&D spending is a bad idea. They already lag behind Toyota and Ford in that department, it is hard to make competitive products without investment.

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Bob Lutz mentioned that the Cruze will have a 9mpg advantage over Cobalt, and that the Cobalt XFE is already on par or better than a simular import compact in terms of milage.

He also later said that the Cruze should be more profitable over the Cobalt in the same way the new Malibu is over the old one.

The Equinox was mentioned briefly. It was said that it will have best in class fuel efficiency, and all GM products will strive for that goal.

The question on HUMMER and the future of the brands was slightly sidesteped.

Bob said that all the brands have a strong future, and each will be more focused. There will be less overlap.

Some notes:

Future product launches will be handled in a way simular to the Malibu, CTS and Vibe.

GM may be considering altering their funding (advertising budget and otherwise) for motorsports.

Many smaller and more alternative propultion vehicle programs have been pulled forward, with new ones added.

Cadillac has a ton of new product, some of which has been slightly altered to better reflect the markets. Lutz hinted at a euro influence.

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The rear-wheel-drive Buick Invicta will be released in the U.S. next spring.

WTF!!!??? We know it's called Invicta but I thought it was EPII?! At least according to Autoblog this is what Rick and Bob said.

Could this be a mistake, or does it mean that the Invicta is the Park Avenue and the EPII car we've been seeing will be called something else?

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Yes Autoblog is wrong--FWD with AWD available, maybe standard.

I liked Bob's comments about reducing redundant product across brands, and eliminating internal company competition.

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Part 2 of todays fun has begun.

Listen live at:

http://www.gm.com/corporate/investor_information/cal_events/ (select GM Actions to Align Business with Current Market Conditions)

Its supposed to be an hour and a half...

If you missed the 9am, listen to this one. The question period should be very good!

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2.3 liter DI engine for the Equinox sounds good (probably makes more than the 185 hp that ancient V6 makes). They should put that in the Malibu also, but GM really needs to keep the weight of cars down also.

RWD Invicta must be a mistake, unless they are doing a G8 clone to replace the LaCrosse, and doing the new LaCrosse on EPII.

Lutz said they would cut down on clones, so why 4 Lambdas, why the G3, G5, G6?

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I think we'll see at least one, possibly two Lambdas cut.

I'd predict the Saturn being dropped, but I'd think the other 3 make sense to keep. Chevy-volume, GMC-mid-scale, Buick-upscale. The Chevy is too new to cut (I would think), and I'm not sure the production line at *forgets where the original lambda factory is* would have enough to build with only the GMC or Buick. The GMC & Chevy are more similar, with the Buick the most differentiated of the bunch, so I would expect the Buick to be the most likely to be kept.

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Cruze looks good. now they need to figure out how to bring the car to market six months early and get it here early '09 rather than fall season. this is the kind of product GM has to focus on, with real results, real affordability, and massive appeal, this is the car that should get the big early unveil, surprise early production announcement, and marketing push.....not volt which will sell for a lot and not a lot of volume.

wagoner's composure and quick answers were steady and strong. though i didn't check for substance, he is confident and reassuring.

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well, i wouldn't read too far in the direction you may be heading. i think it was intentional in that GM wanted to have two high profile and attractive product right behind him. i think it was also an intentional wink and nod at enthusiasts who would pick up on the cruze early unveling as well, a show of understanding they hear us when we say they need to hurry up with the good, fresh product. the Cadillac looked more inflated than the current CTS, the surfacing seemed pumped up, i wonder if that's what the coupe will be...

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