General Motors Company · NYSE:GM
General Motors — Investor Presentation (August 2005)
88 slides from General Motors's investor presentation, Aug 30, 2005
Slide 1: Global Product Development Update
bal Product Development , aA Update Jon Lauckner im Vice President cy a Global Program Management
Slide 2: Global Approach to Product Development
Global Approach to Product Development Global Product Development Wagoner, Clarke, Henderson, Lutz Kempston-Darkes =~ Vice Chairman | Regional President | Souesecet | wamaiomon]| ezceea, | eae” Smith onan Queen Lauckner Vehicle Line Executives Global Architectures & Regional Architectures
Slide 3: Concepts Drive Global Product
Concepts Drive _Global Produc Global Portfolio Global Architectures Manufacturing Flexibility = Improved efficiencies ™ Generate global solutions m Leverage globally ® Plug and play solutions ® Better economies of scale ® Bill of Material re-use ® Global Bill of Process = Common tooling concepts m L
Slide 4: Global Product Planning
Global Product Planning ™@ Focus on biggest, fastest growing, most profitable markets ” @ Leverage converged architectures, “Look Share’ potentials across regions @ Reconfigure Planning organization from “Regional” to “Global Segment” to maximize common solutions ™ Increased emphasis on advanced con
Slide 5: Global Design
Global Design Sao Paulo, Brazil
Slide 6: Global Engineering
Global Engineering One Regional Engineering Center Takes Global Responsibility for an Architecture @ Led by Global Vehicle Chief Engineer ™@ Engineering Center staff supplemented with subject matter experts from around the globe ™@ Responsible for developing architecture, lead vehicle, and bandwidth
Slide 7: Global Program Management
Global Program Management Global Vehicle Development Team Structure Dee eoesracam > Regional Vehicle Line Teams (@ecractleameertey (Product Execution) Region 1 Region 2 Region 3 Functions: Engineering, Manufacturing Purchasing, etc.
Slide 8: Compact Crossover
Compact Crossover luxury RWD
Slide 9: Expected Business Results
Expected Business Results ® Reduction in vehicle architecture count by 50% Better economies of scale in component sourcing — Global footprint eering and.manufacturing costs per reduced @ Global architectures will drive better execution — Faster to market — Higher quality & Great products at low cost
Slide 10: Paul Ballew, Global Market and Industry Analysis
CC an ! Pw poate. J Paul Ballew Executive Director Global Market and Industry An alysis x
Slide 11: Large Truck Market Remains an Important Key to U.S. Sales Strategy
Large Truck Market Remains an Important Key to U.S. Sales Strategy @ 3.4 million unit market — with sub-segments still expanding @ Still very profitable despite competitive and market pressures (due in part to richening mix) ™ GM leadership is at the center of our U.S. market strategy — Profitabilit
Slide 12: Large Pickup and Large Utility Industry
Large Pickup and Large Utility Industry —— Large Pickup —— Large Utility/Large Lux Utility EX} 2,500 ——— = S 2,000 8 = 1,500 = Ee a ————————— 500 0 1999 2000 2001 2002 2003 2004 2005 SAAR CYTD large Pickup 2,186 2,189 2,344 «2,254 «2,373 2,537 2,728 Lge Ute/igelux 718 764 874 898 937 906 851
Slide 13: GM Large Pickup and Large Utility Sales
GM Large Pickup and Large Utility Sales —— Large Pickup —— Large Utility ~~ Large Lux Utility 1,400 1,200 3 = 1,000 en 3B 800 £ ‘= 600 400 —" "4 200 0 1999 2000 + -2001.:««-2002:~«S«2003««-2004_2005SAAR cyID Large Pickup 845 831 979 944 974 975 1,165 Large Utility 361 391 505 505 491 458 435 = Lux U
Slide 14: Large Pickup ATPs Month Moving Average
Large Pickup ATPs 6 Month Moving Average $28.5 we N x uu $27,305 Thousands $26,181
Slide 15: Industry Large Pickup Crew Cab Penetration
Industry Large Pickup Crew Cab Penetration 60% 50% 40% 30% 20% 1999CYTD 2005CYTD 2005 o/(u) June June 1999 10% 6.7% 51.2% 44.5 p.p. June June 2004 2005 June 2003 June 2002 June 2001 June 2000 June 1999
Slide 16: Large Utility ATPs Month Moving Average
Large Utility ATPs 6 Month Moving Average $36.0 $35,650 $35,089 Thousands
Slide 17: Escalade/Denali as a Percent of Large and Large Luxury Utilities
Escalade/Denali as a Percent of Large and Large Luxury Utilities 16% 14% 12% 10% 8% 1999CYTD 2005CYTD 2005 o/(u) June June 4.5% 13.6% June June June June June June June 1999 2000 2001 ~—.2002 2003 2004 2005 ee
Slide 18: Expectations for Large Utility Market Are More Cautious
Expectations for Large Utility Market Are More Cautious H Not anticipating market will reach previous peaks, even with the launch of the next generation @ Portions of the market have declined significantly and will remain under pressure due to competitive alternatives and operating costs/image Howev
Slide 19: West Texas Intermediate Oil
West Texas Intermediate Oil — United States Average $/Barrel — Wrexas Intermediate (in 2000 U.S.§) $90 ‘——— Spot Oil Price: West Texas Intermediate $80 [Prior 1982=Posted Price] ($/Barrel) $70 i) 1) $40 $30 $20 $10 $0 1974 1979 1984 1989 1994 1999 2004
Slide 20: Large Truck — Market Outlook
Large Truck — Market Outlook m@ A number of changes in the last few years have resulted in a more challenging environment: — Competition — Age of portfolio — Gas prices — Development of utility alternatives ™ Our strategy is to address these and others: — Best in class product — including fuel econo
Slide 21: GMNA Turnaround
SPenna Tu Winaround, .
Slide 22: General Motors Functions
General Motors GME Product Development [Manufacturing/Labor Relations Purchasing [Powertrain Sales/Service/Marketing [Quality [Human Resources [Finance R&iD/Strategic Planning sas ‘Communications Legal/Public Policy
Slide 23: Globalizing General Motors
Globalizing General Motors @ Global management of key functions moving at rapid pace — Benefitting from ground work of past decade — Well accepted by organization ™@ Provides ability to deepen expertise and leverage it consistently around the world ™ Tangible results being realized in key areas — Pr
Slide 24: 2005 Priorities/Targets
2005 Priorities/Targets @ Priorities — $4.00-$5.00 EPS* (GRv) — Operating cash flow of $2B™* (ERS) — Capital spending of $8B — Grow global volume @ Regional/Sector Income Targets — North America: $500M (ERS) — Europe: $(500)M — LAAM: $100M — Asia-Pacific: $600M — GMAC: >$2,500M cial items; at curren
Slide 25: GMNA 2005 CYTD Results
GMNA 2005 CYTD Results Net Income* U.S. Market Share™* — Retail Share** 1st Half $(2.5)B 271% 25.6% — Daily Rental Volume™* 429K units U.S. Inventory*™* Annual Capacity 696K units 5.0M units ase on GM website for recor Versus Prior Year Down $3.3B Flat Up 0.6 p.p. Down 49K units or 10% Down 465K uni
Slide 26: What Happened at GMNA in 2005?
What Happened at GMNA in 2005? m@ Weaker sales mix ™ Increased brand-building marketing spend ™@ Pressure on material cost, including cost of product excellence @ Higher health care costs Significant reduction in dealer inventories
Slide 27: U.S. Dealer Inventory
U.S. Dealer Inventory << Down 543K Units > 2.0 15 1.0 1.0 Dec 2004 Mar 2005 June 2005 July 2005
Slide 28: GMNA Turnaround Plan
GMNA Turnaround Plan @ Product excellence ® Revitalize sales and marketing strategy ™ Accelerate cost reduction and quality improvements m@ Address health care burden
Slide 29: Progress in Product Excellence
Progress in Product Excellence ™@ Strong sales of recent launch products ™@ Focus on “Best Products” paying dividends with enthusiast press, others ™@ New products in 2006/2007 concentrated in most profitable/largest/fastest growing segments ™@ Going forward, will reap significant benefits from glob
Slide 30: Product Excellence - Fuel Economy Leadership
Product Excellence - Fuel Economy Leadership ™ GM leads in number of products getting 30 mpg or more ™ Intense focus on range of fuel economy improvement technologies — Industry leader in E85 flexible fuel vehicles — Aggressive roll-out planned for Displacement on Demand and Six Speed transmissions
Slide 31: Progress in Sales and Marketing Strategy
Progress in Sales and Marketing Strategy ® Clear alignment of brands/products/ distribution § First step in shifting to value focus successful: moving to next phase ™ Focus on key markets ® Clear roadmap on distribution channel
Slide 32: Progress in Quality
Progress in Quality ® Consistent recognition for quality achievement — J.D. Power — Strategic Vision — Leveraging in advertising m “Moving Left” in vehicle development process ™ Outlook for 2006/2007 launches very solid
Slide 33: Progress in Cost Reduction
Progress in Cost Reduction m Intense focus on high leverage areas m Enhance sourcing footprint — leverage low cost country presence, global architectures @ Achieve productivity improvement targets and targeted manning levels @ Increase capacity utilization
Slide 34: Address Health Care Burden
Address Health Care Burden m Biggest uncompetitive “line item” is health care — Cost disadvantage of over $4 billion vs. Toyota, others ® Currently in active discussions with UAW
Slide 35: GMNA Performance — Key Drivers for 2006 CY
GMINA Performance — Key Drivers for 2006 CY = Volume/Mix >t @ Net Price = Material vy * ™ Health Care * = Structural Cost /Other *
Slide 36: Closing
Closing ® Transitioning to run business with strong focus on global leverage of key functions — Yielding results already, will see much more ® All business units except GMNA remain on or above track m@ GMNA Turnaround Plan being implemented in vigorous and highly focused manner — Progress encouragin
Slide 37: Sales and Marketing
Sales aint Marketing mY pdat “ee Mark LaNeve GMNA Vice President Vehicle Sales, Service and tla
Slide 38: Agenda
Agenda @ Sales Recap @ U.S. Market Growth Plan — GM Brand Assessment — Value Promise and other strategic moves — Key Market Strategy — PBG Channel Alignment ™ Closing Remarks
Slide 39: July Sales and Share Summary
July Sales and Share Summary Sales % Change | Share Pt. Change July 530,027 19.8% 28.7% (Oy) CYTD 2,882,397 4.6% 271% 0.0 Inventory (7/31/05) 695,642 Compared to (7/31/04) (465,000) ™@ Best July since 1986 @ All divisions up year-over-year Mi Chevy ahead of Ford by 56,000 units i Cadillac moves into
Slide 40: U.S. Market Growth Plan
U.S. Market Growth Plan Als Clearly differentiate all divisional brands and roles . Go to market with a “Total Value Proposition” . Focus on key markets Become a consistent world-class retail channel
Slide 41: Clearly Differentiate All Divisional Brands and Roles
Clearly Differentiate All Divisional Brands and Roles Action Plans — Deliver eight distinct brands to the market @ Brand positioning must be comprehended in product planning, design, engineering and marketing & Differentiate media selection by brand and by market @ Exploit recent improved share of v
Slide 42: U.S. Market Overview
U.S. Market Overview Mainstream Luxury Focus Brands VW Audi Toyota Lexus Scion Nissan Infiniti Honda Acura _ Lincoin aquar,Volvo) Mercury; Mazda _. Mercedes Benz Chrysler, Jeep dillac Buick, Pontiac, GMC HUMMER, Saab Saturn Die
Slide 43: Brand Positioning
Brand Positioning Performance Luxury ee
Slide 44: Go to Market Strategy
Go to Market Strategy Volume Focus Low base prices 1 Aggressive marketing m EZ Spec m Balanced fleet presence Value Focus = Competitive base prices = Competitive incentives m Reduced fleet emphasis Premium Focus 1m Brand-driven marketing 1 Up-level trim and special edition emphasis 1 Limited fleet p
Slide 45: Go to Market with a Total Value Proposition
Go to Market with a “Total Value Proposition” (Total Value Promise) Action Plans ™@ Compelling MSRPs that represent value Competitive incentives and financing | Total @ Simplified option packaging strategy Value Improved ®@ Great content, features and technology Residual (OnStar and StabiliTrak) Val
Slide 46: IntelliChoice.com — Web Shopping Example
IntelliChoice.com — Web Shopping Example @ GM was not price competitive Malibu $19,200 Accord $17,095 x Camry $19,025 5 Kester) Sams Exeneet
Slide 47: Competitive Web Shopping
Competitive Web Shopping @ For the 2006 MY, we plan to Malibu $17,990 be price competitive with Accord $17,095 “value” vehicles Camry $19,025 L_exnwes eaTuats | ecord ecord $17,095 2006 MY competitive pricing still being announced
Slide 48: June/July Employee Discount
June/July Employee Discount & Divisional messages were on brand strategy (e.g., Buick quality) m@ Excellent message alignment between corporate and division communications ™@ 100% of Dealer LMG advertising mirrored corporate advertising ™@ Consumer recall of June/July campaign at an all time high (8
Slide 49: Employee Discount — Continuation
Employee Discount — Continuation m Employee discount program continued on 2005 models as a sell-down tool — Program extended based on June/July performance and aligns with “Total Value Promise” — Net price vs. consumer cash play m™ Employee discount program announced on 2006 full-size utilities and
Slide 50: Value Leaders for MY 2006
Value Leaders for MY 2006 Saturn ION $12,490 Chevrolet HHR $15,990 Chevrolet Malibu $17,990 Chevrolet Uplander (SWB) $21,990 Chevrolet Impala (211) $21,990 Chevrolet Silverado Crew $27,990 Chevrolet Tahoe $34,990 Pontiac G6 (4 cyl.) $17,990 Pontiac Solstice $19,995 “HUMMER H3 $29,500
Slide 51: ALG Month Residual Values
ALG 36 Month Residual Values % of MSRP Vehicle Beginning of Model Year O6MY Impala LS 41% OSMY Impala Base 34% O6MY DTS 48% OSMY Deville Base EYES O6MY Gé Base 39% O5MY G6 Base 36% O6MY H3 51%
Slide 52: GM Dealer Inventory
GM Dealer Inventory 1,400,000 1,238,977 1,200,000-) 1,160,775 1,000,000 =1,000,000 July 2004 Dec 2004 July 2005 Dec 2005
Slide 53: Daily Rental Walk Down Plan
Daily Rental Walk Down Plan ® Weare reducing our daily rental volume and plan to continue ™ Examples of reduced/eliminated capacity: — Lansing (Grand Am, Classic) — Baltimore (Astro, Safari) — Oklahoma City-one shift (TrailBlazer EXT, Envoy XL) Daily Rental Sales (July CYTD 2005 vs. CYTD 2004) Ford
Slide 54: Become a Consistent World-Class Retail Channel
Become a Consistent World-Class Retail Channel Action Plans @ Channel alignment — Chevrolet — Saturn — Buick-Pontiac-GMC (BPG) = Cadillac/HUMMER/Saab ™@ Continued primary focus on BPG channel consolidation m@ Address operator, locations and facilities issues ™@ Continue to drive sales and CSI focus
Slide 55: Running the Business
Running the Business SIMPLIFY @ Everything begins with product, but it doesn’t stop there ™ Great brands are built on equal parts — Product — Image — Dealer/retail experience
Slide 56: Global Purchasing and Supply Chain
Glob furchas gy am Pats ate; Bo Andersson re Vice President te Global Purchasing and Supply Chain as
Slide 57: Global Purchasing
Global Purchasing m@ What We Do m How We Do It = Challenges and Opportunities
Slide 58: Global Purchasing Summary
Global Purchasing Summary ™@ Supply Base performance good in areas of Delivery, Quality and Launch ™@ Convergence of issues (raw material, global competition) presenting challenges ™@ GM's growth in Eastern Europe, Korea and China highlighting new opportunities ™@ Toregain and increase previous mome
Slide 59: Our Goal Is to Manage GM's Global Supply Chain
Our Goal Is to Manage GM’s Global Supply Chain and Help Us Build Competitive Advantage Managed by 4,000 Employees in 40 Countries
Slide 60: Global Purchasing and Supply Chain Priorities
Global Purchasing and Supply Chain Priorities © &© Chain Launch Global Logistics Capability Right Cost Priorities Aligned with Corporate Strategies
Slide 61: Greater alignment with Global Engineering
® Greater alignment with Global Engineering ™ Product focused/global platforms ™ More focus on parts/components and opportunities ® More global focus on complexity reduction
Slide 62: "20 in 3" What We Learned
“20 in 3” What We Learned Has been effective to drive: @ Stretch mentality (internal and external) ®@ Multiple year focus/targets @ Purchasing/Engineering alignment ™@ Consistent metrics and message to Supply Base @ Development of new tools (e.g., Benchmark/ Teardown, Co-Sourcing and Value Chain) Dr
Slide 63: "20 in 3" Results — Top Suppliers
“20 in 3” Results — Top 28 Suppliers 50% S Annual Savings % 2000-2002 2003-2005 Improved Results vs. Prior Years
Slide 64: Material Cost Reduction Over Time
Material Cost Reduction Over Time Present Future + Competitive sourcing + Global platforms + Capabilities inlow cost regions + Restructure Supply Base + Deeper into value chain + Component sourcing — Raw material pressures + Footprint optimization — Reduced GMNA volume + Raw material mitigation — Ex
Slide 65: Supplier Integration — Seat System Example
Supplier Integration — Seat System Example Strategies @ “Right” level of supplier integration Ai & Capitalize on opportunity for fi Bill of Material re-use of structures @ Optimize footprint for trim covers, leather and fabric The Key Is Finding Right Level of Supplier Integration to Maximize Value
Slide 66: Restructuring of Supply Base - Capacity Utilization Example
Restructuring of Supply Base - Capacity Utilization Example es) Current Status Open Future Status M Used © 50 50 40 40 30 30 20 20 10 10 0 C) A B ic D E A B c D E Suppliers Suppliers ® 5 global suppliers ® 4 global suppliers ™ 62% average capacity utilization ™ 80% average capacity utilization Conso
Slide 67: Restructuring of Supply Base — Example
Restructuring of Supply Base — Example a) a) Current/Future’ Management, Business Supplier A Supplier B Gy) Supplier C GS Supplier D (ERI) SupplierE = Ci) (eRe) (eRe) a Supplier F Gs Grow Fix Exit Supplier A Supplier C Supplier E Supplier B Supplier D Supplier F
Slide 68: Supplier Footprint
Supplier Footprint ™@ Develop local Supply Base for emerging markets — China, Korea, Eastern Europe @ Improve competitiveness in mature markets by sourcing right components to the right place globally — Centers of expertise and sustainable cost structure ™@ Supported by global organization and globa
Slide 69: Raw Material Mitigation Strategies
Raw Material Mitigation Strategies Material Mitigation Strategies @ Multi-year contracts Steel ™ Resale program for suppliers ™@ Reduce usage/improve yield Aluminum ™ Switch to steel (ex. 800 liftgate) Precious epi nriging Metals ™ Material substitution ™ Hedging Copper Lead ™ Hedging Magnesium
Slide 70: Troubled Supplier Challenges
Troubled Supplier Challenges m U.S. competitive pressures currently driving additional stress in domestic supply community @ Common themes in recent bankruptcies — Highly leveraged — Substantial merger/acquisition activity — Higher labor costs — High exposure of raw materials (petroleum, steel) ™ Pr
Slide 71: Conclusions
Conclusions ®@ Global Purchasing and Supply Chain has a long track record of contribution to GM ™ Currently have some challenges to work through ™ Strategies in place to overcome challenges and regain momentum
Slide 72: John Devine, Vice Chairman & CFO
John Devine es Ss ‘ Vice Chairman & CFO q 7 a
Slide 73: Agenda
Agenda = Economic/Auto Industry Update = GM Regional Business Update = Balance Sheet Strength
Slide 74: Global Economic Update
Global Economic Update @ Flattening of yield curve ™ Oil price increases have exceeded expectations ® Global economic growth remains healthy @ U.S. economic expansion remains solid ™ Western Europe shows some signs of a partial rebound m@ AP has regained growth momentum m LAAM economies continue to
Slide 75: Global Auto Industry Overview
Global Auto Industry Overview @ Industry growth keeping pace with economy — 2.6% annual unit growth thru 2014 — 6.2% annual revenue growth thru 2014 @ Brisk growth in emerging markets @ Richening of mix in more mature markets ™ Continued competitive pressure on products and pricing in key markets @
Slide 76: Global Industry Growth (2004-2014)
Global Industry Growth (2004-2014) sia Pacific +12.4M units or 73%
Slide 77: Agenda
Agenda = Economic/Auto Industry Update = GM Regional Business Update = Balance Sheet Strength
Slide 78: GME
GME m H1 net income loss of $66M*; Q2 profitable ®@ Market share thru July is 9.6%, up 0.1 p.p. ™ GMDAT products providing market share gains ™ Positive reaction to Zafira launch ® Solid material cost performance ® Pricing continues to be challenging ____ “Adjusted basis, see Q2 Earnings Release on
Slide 79: GME Restructuring Update
GME Restructuring Update m Expected headcount reduction of about 10,000 employees by end of 2005 ™ Modest amount of charge-offs in H2 ® Results starting to impact profitability ™ Continue focus on revenue optimization ®@ Pursuing growth opportunities in Eastern Europe and Russia
Slide 80: GMLAAM
GMLAAM @ H1 net income $79M m Market share thru July is up 0.3 p.p., while industry is up 20% ® Brazilian Real appreciation negatively impacting export profitability ® South Africa industry up 27% and GM share up 2.4 p.p. (GMSA volume up more than 54%) ™ Strong growth in Argentina, Venezuela and Mid
Slide 81: JMD12_00
JMD12_00
Slide 82: JMD13_00
JMD13_00
Slide 83: JMD14_00
JMD14_00
Slide 84: JMD15_00
JMD15_00
Slide 85: JMD16_00
JMD16_00
Slide 86: JMD17_00
JMD17_00
Slide 87: JMD18_00
JMD18_00
Slide 88: JMD19a
JMD19a