General Motors Company · NYSE:GM
General Motors — Investor Day (August 2011)
66 slides from General Motors's investor day presentation, Aug 11, 2011
Slide 1: Conference
conference
Slide 2: Randy Arickx
Randy Arickx EXECUTIVE DIRECTOR, GM INVESTOR RELATIONS & CORPORATE COMMUNICATIONS
Slide 3: Forward Looking Statements
FORWARD LOOKING STATEMENTS In this presentation and in related comments by our management, our use of the words “expect,” “anticipate,” “possible,” “potential,” “may,” “would,” “could,” “should,” “project,” intended to identify forward looking statements that represent our current judgment about pos
Slide 4: Agenda
AGENDA Everything Starts and Ends with Great Products DAN AKERSON Great Products Will Drive Results DAN AMMANN Engineering Complexity Reduction and MARY BARRA Productivity Improvement Material Performance and Improving Supplier Relations BOB SOCIA Low Cost Global Manufacturing Footprint / Flexibilit
Slide 5: Dan Akerson
Dan Akerson CHAIRMAN & CEO
Slide 6: Design, Build and Sell the World's Best Vehicles
1. Design, Build and Sell the World’s 2. Strengthening Our Brand Value 3. Growing Profitably Around the World 4. Maintaining a Fortress Balance Sheet
Slide 7: Dan Ammann
g Dan Ammann IEF FINANCIAL OFFICER
Slide 8: Business Strategy
BUSINESS STRATEGY New Business Model Leverage to Global Growth Significantly Lower Risk Profile
Slide 9: Key Messages
KEY MESSAGES ¶Long-term sustainable results ¶Path to achieve strong margins
Slide 10: Financial Strategy Enables Long Term Opportunity
FINANCIAL STRATEGY ENABLES LONG TERM OPPORTUNITY ¶ Break-even at bottom, strong margins at peak ¶ Fortress balance sheet ¶ “Straight-line”
Slide 11: Fortress Balance Sheet
FORTRESS BALANCE SHEET Minimi Prudent Fully Funded Investinent a Liquidity De-risked Debt ; Grade Reserves Pension Plan $4.7B $39.7B $(10.8)B* BB-/Ba2/BB- wwe we
Slide 12: Straight-Line Investment Strategy
STRAIGHT-LINE INVESTMENT STRATEGY This Not This Business Cycle == Engineering/Capex Spend — Straight-line Investment Strategy Drives Efficiencies ct
Slide 13: Good Progress... More to Do
GOOD PROGRESS… MORE 2011 H1 Results ($B) Q1 Q2 H1 Revenue 36.2 39.4 75.6 EBIT – Adjusted 2.0 3.0 5.0 EBIT – Adjusted Margins 5.6% 7.5% 6.6%
Slide 14: External Expectations — 2011 Auto EBIT Margin
EXTERNAL EXPECTATIONS — 2011 AUTO EBIT MARGIN 12% 10% 10% 10% 3% 7% ppd 6% a% ’ J a J 0% BMW Hyundai Daimler VW Ford Nissan Honda GM Toyota Peugeot Renault
Slide 15: Create and Sustain Operating Leverage
CREATE AND SUSTAIN OPERATING LEVERAGE ¶ Develop great products ¶ Increase engineering and capital efficiency ¶ Optimize purchasing and supply chain ¶ Improve capacity utilization ¶ Implement global brand strategy ¶ Optimize go-to-market execution
Slide 16: Key Messages
KEY MESSAGES ¶Long-term sustainable results ¶Path to achieve strong margins
Slide 17: Mary Barra
Slide 18: Straight-Line Investment Strategy
STRAIGHT-LINE INVESTMENT STRATEGY This Not This Business Cycle == Engineering/Capex Spend — Straight-line Investment Strategy Drives Efficiencies ct
Slide 19: Churn Impact
CHURN IMPACT ¶ Historically, the following practices have contributed to Product Development’s – Stop/start projects – Project cancellations – Late scope changes – Change in lead engineering center ¶ A consistent investment will minimize churn Cost of Churn for Capital is Estimated at ~$1B Annually
Slide 20: GM Will Cut the Number of Architectures
GM WILL CUT THE NUMBER OF ARCHITECTURES BY 50% OVER THE NEXT DECADE = = , abies © Regional os Core 2: @ Col gate ez pie ee oe el ee Paarl 24 90% of Forecast Volume pr S ‘on Core Architectures 31% of Volumeon Core Architectures
Slide 21: GM Plans to Reduce the Number of Engine Platforms
GM PLANS TO REDUCE THE NUMBER OF ENGINE PLATFORMS BY APPROXIMATELY 50% OVER THE NEXT DECADE Number of Engine Platforms 20 16 2009 2012 2015 2018 Goal
Slide 22: Impact of Reducing Vehicle Architectures and Engine Platforms
IMPACT OF REDUCING VEHICLE ARCHITECTURES AND ENGINE PLATFORMS Major Benefits Include: ¶ Engineering expense ¶ Capital – Fewer mouths to feed – Shared tooling – More robust architectures/platforms – Leverage tooling design – Reduce prototype material/tooling ¶ Other ¶ Material cost – More new product
Slide 23: Best of the Best Practices Used Globally
Person Months “BEST OF THE BEST” PRACTICES WILL BE USED GLOBALLY TO IMPROVE EFFICIENCY New Architecture Major on C/O Architecture 20,000 20,000 More 116,000 Efficient ¥ 16,000 i wl fam 000 B 000 é 35% 4,000 4,000
Slide 24: Great Products Developed More Efficiently
GREAT PRODUCTS DEVELOPED MORE EFFICIENTLY ¶ Consistent investment strategy/stable product plan –Reduce portfolio changes –Reduce program churn ¶ Leverage core architectures –50% reduction in architectures ¶ Reduce engine platforms –50% reduction ¶ Enhanced productivity –Standardize Best Practices ac
Slide 25: Bob Socia
tei BOD Socia | VICE PRESIDENT, GLOBAL PURCHASING AND SUPPLY CHAIN
Slide 26: Global Purchasing & Supply Chain
GLOBAL PURCHASING & SUPPLY CHAIN 2011 Global Snapshot # of Suppliers Approximately 3,200 Direct Suppliers # of Creativity Teams 76 Global/30 Regional # of Countries People Located in 35 Countries # of Part Numbers Approximately 191,000 Direct Part Numbers Vehicle Forecast 9.6M Vehicles (including JV
Slide 27: Supplier Relations — Survey Results
SUPPLIER RELATIONS — SURVEY RESULTS OEM - Supplier Working Relations Index t eel a8 2 How 22 a =S30— a8 2 Cheyster te) a 62 le 3 5 200220032008 -—«2005.«2006©«2007-«2008-:«2009«2010 «2012 at Cones 301 Panning Penge ne
Slide 28: Supplier Relations
SUPPLIER RELATIONS Where We What We Have Done Have Been and What We Are Doing Issues Identified Current Actions ¶ Communication ¶ Enhance supplier meetings & GM Supply Power ¶ Conflicting objectives with ¶ Co-location and realignment with Engineering Engineering ¶ Critical capacity management ¶ 18-2
Slide 29: Supplier Council Workstreams
SUPPLIER COUNCIL WORKSTREAMS Collaboration –Purchasing/Engineering/Supplier Strategic Sourcing Process Process Updates Early Supplier Engagement Training Achieve/Maintain Contracted Price Quoting Process Next Generation Business Directed Buys Capacity Management Customer Care & Aftersales Proactive
Slide 30: Strategic Sourcing Process
STRATEGIC SOURCING PROCESS Program Framing Document of. ‘Vehicle Program Start of Tnitiation Strategic Intent Initiation Production PFI DSI VPI SOP “As \s” “To Be” Goal: Optimize Material Cost from Vehicle Development through Production
Slide 31: Diana Tremblay
) Diana Tremblay GLOBAL CHIEF MANUFACTURING OFFICER |
Slide 32: Manufacturing Enabling New Business Model
MANUFACTURING ENABLING NEW BUSINESS MODEL… ¶Breakeven GMNA at bottom of cycle – 1.5M units lower GMNA capacity than 2005 ¶Lower risk profile, increased flexibility – U.S. hourly labor costs down $11B since 2005 ¶Keeping pace with industry growth – Plans to increase BRIC capacity by 45% by 2015
Slide 33: GMNA Capacity to Meet Upside Demand
GMINA CAPACITY TO MEET UPSIDE DEMAND Capacity Utilization g H g 50% >150% Pro-Forma GMNA Capacity Utilization at 16M Unit U.S. Industry ~95% 20116 2Shifts, 3Shifts, With Overtime StraightTime Straight Time For Peak Volume
Slide 34: Global Assembly Footprint
GLOBAL ASSEMBLY FOOTPRINT Incremental Future Vehicle Production Sources, 2015 vs. 2011 5 af Low Cost v ~~, a Countries 4 ~80% Countries os High Cost Countries
Slide 35: Flexibility and Core Architectures
FLEXIBILITY AND CORE ARCHITECTURES ¶ Common Architectures = Faster to Market – Buick Regal built in Rüsselsheim while Oshawa was being tooled ¶ Flexible Plants = Market Adaptability – Chevy Volt, Malibu and Impala all to be built on same line at Detroit-Hamtramck ¶ Flexibility + Creativity = Asset U
Slide 36: Over 50% of 2015 Production in Flexible Network
Over 50% of 2015 production will be built in a FLEXIBLE NETWORK of plants that connects across Core Architectures and Regions
Slide 37: Global Manufacturing System
GLOBAL MANUFACTURING SYSTEM Built-in Quality Continuous Improvement Standardized Work EMPLOYEE ENGAGEMENT Lean Material Strategies
Slide 38: Manufacturing Competitive Advantage
MANUFACTURING COMPETITIVE ADVANTAGE Very Competitive Global Footprint FLEXIBILITYpaying dividends …andCAPACITY UTILIZATION Seeking to be Quality leader in every market “For GM, manufacturing a competitive advantage… –Ron Harbour, Oliver Wyman
Slide 39: Conference
conference
Slide 40: Chief Marketing Officer
CHIEF MARKETING OFFICER
Slide 41: GM Global Brand Strategy
GM GLOBAL BRAND STRATEGY GM Brand Portfolio Role Core Brand Promise Area Focus Chevrolet Global Mainstream Cars for Life’s JourneyGlobal Cadillac Global Luxury Red-blooded Luxury Global Buick Regional Luxury Inviting Luxury NA, China GMC Regional Premium Professional-grade-up for the Challenge NA Op
Slide 42: Global Strategy Built Around Chevrolet & Cadillac
GLOBAL STRATEGY BUILT AROUND CHEVROLET & CADILLAC Memo: 2010 CY 2016 CY Sales Mix Sales Mix Brand N. A. Europe China S. A. Germany U.K. Russia India Australia S. Korea (Forecast) Global Chevrolet 61% 65% Mainstream Regional Opel 13% 13% Mainstream Regional Buick 10% 9% Luxury Regional GMC 6% 5% Prem
Slide 43: U.S. Luxury Brand Positioning
U.S. LUXURY BRAND POSITIONING Flank the Middle Inviting Luxury Traditional Luxury Red-Blooded Luxury PRODUCT Primary Competitors PRODUCT Sculptural Beauty Provocative / Powerful Thoughtful / Alluring Best of the Best PEOPLE PEOPLE Quiet Confidence Ambitious / Individualistic Curious / Balanced Unmis
Slide 44: Europe Brand Positioning
EUROPE BRAND POSITIONING Luxury Traditional Luxury Primary Competitors Mid-Market Primary Competitors Mid-Market Forward-thinking Primary Competitors Cars for Real Life Cars for PRODUCT Life’s Journey Accessible German Engineering Energizing / Flowing PRODUCT PEOPLE Purposely Empowering Progressive
Slide 45: China Brand Positioning
CHINA BRAND POSITIONING Luxury Red-Blooded Luxury PRODUCT Traditional Luxury Provocative / Powerful Best-of-the-Best Primary Competitors PEOPLE Ambitious / Individualistic Mid-Market Inviting Luxury Unmistakable Swagger Primary Competitors PRODUCT TONE Cars for Sculptural Beauty Visceral / Energetic
Slide 46: Chevrolet & Cadillac's Global Aspirations
CHEVROLET & CADILLAC’S The best, strongest, consumer A consumer goal not an brands in the world…. automotive product goal ….salesand revenue will follow if we do this right Design, build and sell the world’s best We are going to increase Our aim is to make We the aim to Hyundai is determined fully o
Slide 47: The Most Valuable Global Consumer Brands
THE MOST VALUABLE GLOBAL CONSUMER BRANDS Country Globality Financial Brand Blended Brand of Origin Score Score Score Score 1. Google United States 71 93 100 75 2. Apple United States 74 100 73 71 3. Visa United States 73 44 68 55 4. Louis Vuitton France 83 22 71 52 5. IBM United States 74 56 43 52 6
Slide 48: The Goal
The GoalOur direct competitors are Toyota, Volkswagen, Hyundai, and Ford; however in the eyes of consumers, it’s time for Chevrolet our brand and align true global brands like Apple
Slide 49: Overall Implications
OVERALL IMPLICATIONS ¶ Create iconic consumer brands that transcend the automotive category and become fabric of culture ¶ Chevrolet and Cadillac set the – Commitment for Cadillac to compete ¶ Utilize regional / local brands to bolster performance (e.g. aggressive Opel effort forces VW to focus reso
Slide 50: Don Johnson
Don Johnson Vice President, U.S. Sales Operations
Slide 51: 2011 Industry Outlook
2011 INDUSTRY OUTLOOK Economic Assumptions ¶ U.S. economy grew well below trend in H1 ¶ Impacts of temporary factors on economy are abating Downside Risk ¶ Higher oil prices ¶ Prolonged weakness in job market ¶ Consumer confidence Upside Opportunity ¶ Stronger release of pent-up demand ¶ Faster reco
Slide 52: Key Initiatives
KEY INITIATIVES ¶ Improving dealer network –Facilities –Dealer profitability ¶ Improving inventory management ¶ Improving vehicle financing ¶ Build on our momentum
Slide 53: Improving Dealer Network
IMPROVING DEALER NETWORK Facilities ¶ Facility Image Program – Create a welcoming retail shopping environment – Increase value to our customers – Improve brand image ¶ Dealer financial support –if all compliance requirements are met – Facility Image Program – Training – Owner Retention Program – Dig
Slide 54: Holiday Chevrolet
Holiday Chevrolet | Whitesboro, TX.
Slide 55: Holiday Chevrolet
Holiday Chevrolet Whitesboro,TX
Slide 56: Lunghamer Buick GMC
Lunghamer Buick GMC Waterford, MI
Slide 57: Lunghamer Buick GMC
Lunghamer Buick GMC Waterford, MI
Slide 58: Silver Star
Silver Star Thousand Oaks,
Slide 59: Silver Star
Silver Star Thousand Oaks, CA
Slide 60: Improving Dealer Network: Facility Image Timeline
IMPROVING DEALER NETWORK Facility Image Timeline ¶ 460+ imaged facilities by CYE 2011 ¶ 4,000+ completions projected by end of 2014 –96% of dealerships currently enrolled, representing 99% of retail volume
Slide 61: Improving Dealer Network: Profitability
IMPROVING DEALER NETWORK Profitability ¶ New vehicle retail throughput ¶ Return on sales –493 (2011 annualized) –Up 0.9 points since 2009 Up 49% since 2009 At industry average CYTD** Highest domestic OEM* ¶ Percent dealers profitable ¶ Return on assets –92.8%, up 15 points –Up 2.2 points vs. 2009 si
Slide 62: Improving Inventory Management
IMPROVING INVENTORY MANAGEMENT Process ¶ Rigorous process that fully integrates all departments into monthly Go-To-Market planning and execution Inputs Outputs Economic outlook Residual management Competitive intelligence Sales targets Production adds / cuts Incentive trends Market share targets Pro
Slide 63: Optimal Inventory – Planning
OPTIMAL INVENTORY – PLANNING GM – 2011 & 2012 Retail Sales, Stock, and Production Not Actual – Illustrative Data Only ¶ ¶ KeepGet Jan-11 the Feb-11 the retail Mar-11 Apr-11 retail May-11 Jun-11 inventory Jul-11 inventory Aug-11 right right Sep-11 Oct-11 Nov-11 Dec-11 ¶ ¶ Jan-12 Feb-12 Get Put Mar-12
Slide 64: Improving Vehicle Financing
IMPROVING VEHICLE FINANCING Partner Strategy ¶ GM Financial, Ally, USB, Wells Fargo –Offer dealers and consumers choice –Create a competitive environment –Lower cost of funds Results ¶ CYTD lease penetration: 14.7% (Ind: 20.6%) ¶ CYTD sub prime loan penetration: 6.5% (Ind: 5.5%) ¶ Wholesale floorpla
Slide 65: Build on Our Momentum – 2011 Accomplishments
BUILD ON OUR MOMENTUM –2011 ACCOMPLISHMENTS U.S. Results Through July* ¶ Retail Sales 23% ¶ Total Sales 16% ¶ Retail Share 1.3 pts ¶ Total Share 0.9 pts ¶ Incentive Spending (% ATP vs. CY 2010 –JD Power PIN) 0.2 pts ¶ Residual Values (Gap to competitive set –ALG) 0.2 pts vs. same period in 2010
Slide 66: Conference
conference