General Motors' CEO Hosts Annual Stockholders' Meeting Conference (Transcript)

Seeking Alpha

General Motors Company (GM)

Annual Stockholders’ Meeting Conference Call

June 06, 2013, 09:30 am ET

Executives

Dan Akerson - Chairman & CEO

Anne Larin - Corporate Secretary

Analysts

Presentation

Dan Akerson

Good morning ladies and gentlemen. I am Dan Akerson the Chairman and Chief Executive Officer of General Motors and it’s my pleasure to welcome you to our Fourth Annual Meeting of GM Shareholders.

As you entered the meeting today, you were given a folder and several documents including the rules of the meeting that set forth the order of business and the conduct of meeting guidelines, the proxy statement and explanation of forward-looking statements and our 2013 full line product brochure. I hope you will take a few minutes to read this material.

The first item on the agenda today is to report on GM state of business. Then we will begin the business portion of the meeting at which time we will address the matters set forth in the proxy statement. After that, we will have some time for questions and comments from the audience.

Before we begin, I would like to take this opportunity to introduce our incumbent Directors and I would ask them to stand as I call their name. David Bonderman, Co-Founding Partner and Managing General Partner, TPG; Erroll Davis., Superintendent, Atlanta Public Schools; Steve Girsky, Vice Chairman, General Motors; Neville Isdell, Retired Chairman and CEO, Coca-Cola Company; Rob Krebs, Retired Chairman and CEO, Burlington Northern Santa Fe Corporation; Kathy Marinello, Chairman and CEO, Stream Global Services, Inc.; Mike Mullen, Former Chairman, Joint Chiefs of Staff; Jim Mulva, Retired Chairman and CEO of ConocoPhillips; Pat Russo, Retired CEO, Alcatel-Lucent; Tom Schoewe, Retired Executive Vice President, CFO, Wal-Mart; Tom Solso, Retired Chairman and CEO, Cummins, Inc.; Carol Stephenson, Dean, Richard Ivey School of Business, University of Western Ontario and Cynthia Telles, Director, UCLA Neuropsychiatric Institute. Thank you all for your service to General Motors and for the valuable counsel and advice you’ve offered to me and our leadership team.

Let’s begin with the state of General Motors. I am very pleased to report that in 2012 we created significant long-term value for our customers and for our stakeholders. We did it by keeping a razor sharp focus on the four pillars of our operating strategy which are now deeply embedded into our culture. They are design, build and sell the world’s best vehicles, product, build strong brands, grow profitability wherever operate and maintain a fortress balance sheet.

We continue to make good progress against these pillars. In 2012, our global revenues were more than $152 billion, up $2 billion from a year ago. Behind that figure is the fact that more Americans buy their cars and trucks from General Motors than any other automaker. For that matter, more Chinese customers do too.

Our joint ventures have now outsold all other automakers in China for eight consecutive years. In fact, we outsold six of the top Japanese automakers combined in 2012. That’s the reward for investing early and staying on offense.

Turning to our profits; we earned $7.9 billion in EBIT-adjusted, which is earnings before interest, expense, taxes adjusted for special items. All of our business units were profitable, except for GM Europe, but we have stabilized the business there despite the fact that our sales have dropped to 20-year low.

We’re even seeing green shoots from our restructuring activities and new product launches, which will help us reach our objective to deliver breakeven EBIT-adjusted results by mid-decade. When you add in our solid first quarter results, which included better-than-expected results in Europe, it brings our cumulative EBIT-adjusted earnings to $25 billion since the beginning of 2010.

Last year we also saw GM’s fortress balance sheet become even stronger. Our automotive business generated $9.6 billion in net cash from operating activities. We reduced our U.S. pension liabilities by approximately $28 billion. We secured an $11 billion investment grade credit facility. And we ended the year with total liquidity of $37.2 billion. At the same time, we increased our capital expenditures from $6.2 billion in 2011 to $8.1 billion in 2012 in order to bring global competitive advantage to General Motors on a global basis.

Finally, we introduced some stunning, and phenomenally well-received vehicles, which I’ll talk about in a few minutes. Our steady progress has not gone unnoticed on Wall Street. In fact, one investor told me how refreshing it is to talk product strategy with the GM team, rather than things like credit risk.

It’s refreshing to us too. And the change in the conversation about GM has helped drive our stock price, which was up 42% in 2012. The stock has continued to perform well this year too, with a roughly 20% increase year-to-date. Of course, the fact that the U.S. Treasury Department is selling GM stock has been welcomed by other investors. So has Standard & Poor’s decision to add General Motors to the S&P 500 Index.

But without question, the most important factor is, and always will be, the quality and desirability of the products we build. I am very proud to say that our newest vehicles are winning critical praise, awards, and most importantly, customers from around the world. These include the Cadillac XTS and ATS, which was the first North American Cadillac, first Cadillac to win the North American Car of the Year. The Chevrolet Onix, which now accounts for about one-quarter of our sales in Brazil was introduced last year. And the Opel/Vauxhall Mokka, which has currently more than 100,000 dealer and customer orders.

Our two global brands are leading the way. For example, Cadillac sales began to surge in the second half of 2012. Through May, Cadillac has been the fastest-growing brand in the United States, based on year-over-year sales. Cadillac is growing faster than it has since 1976. 2012 also saw Cadillac begin to drive to triple its annual sales in China to 100,000 units within two years. The first step involved local production of the XTS, which began a few months ago.

Turning to Chevrolet, we have now seen 10 consecutive quarters of record global sales versus the prior year, thanks to all-new vehicles like the Spark, the Sonic and the Onix. To keep momentum going and forge even stronger relationships, Chevrolet, Buick and GMC customers in the United States will now be covered by a new maintenance program that includes scheduled services for two years or 24,000 miles, whichever comes first. It makes sense to do this to kick the ownership experience off on the right foot. It’s always strategic, because we know that customers who service their vehicles at our dealerships are much more likely to purchase another GM product down the road. The products we've launched in 2012 are just a tip of the spear. As I speak, the first all-new full-size pickup trucks in GM in six years are arriving in dealer showrooms across North America. Not only are the new Chevrolet Silverado and the GM Sierra more capable and luxury car quiet, our new V8 engines offer superior towing and fuel economy.

The trucks will be followed by the show-stopping, 455 horsepower Corvette Stingray. One look under the hood of the new Corvette will tell you that it’s not old-fashioned Detroit iron. The Stingray uses advanced lightweight materials like carbon fiber, sophisticated engine management technologies and incredible attention to detail to generate the performance.

Then there is the gorgeous Cadillac ELR, extended range electric vehicle. The all-new Cadillac CTS, which is some 200 pounds lighter than a comparable BMW 5-Series. These vehicles and many more from Buick, Opel and our other brands are the most visible signs of our progress, but there is even more work going on behind the scenes to help us reach our true potential.

For example, at last year’s meeting, I described how our product development teams are reducing the number of vehicle and powertrain architectures we use in order to improve our economies of scale. Our objective is to derive 96% of our forecasted volume from 13 global architectures and four regional architectures by 2018.

This work has been complemented by changes we made last year and the flattened structure and created accountability for our product execution, profitability and customer satisfaction. It’s also being managed using new analytical tools. Starting this year, we are tracking our profits by both model and country of sale. It’s incredibly insightful. And over time, we’ll be able to narrow our analysis down to vehicle identification globally, which will provide us detail we’ve never had before.

When you step back and consider all of the sophisticated design, engineering and financial tools you need to compete in a dynamic global market, it’s clear that information technology must be a core competency for any 21st Century competitor. That’s why we are moving quickly to in-source our IT.

When GM outsourced the majority of its IT in the mid-1980s, the tools of the trade were modeling clay, calculators and typing tools. Now every single link of the automotive value chain is connected from the design studio to the showroom floor, so it’s supremely important that we control our own destiny. That is why we’re bringing IT back home to GM where it belongs.

We have already built one world-class GM data center and construction is underway on a second that will be fully redundant. We’re also hiring more than 4,000 high technology workers to develop software exclusively for General Motors. When we’re finished, GM will have by far the most robust business applications that we have had in a long time. They will be more accurate, timely. Our data will be more secured and will have lowered our cost and complexity at the same time.

Another part of GM that has been transformed is our research & development team. We have recaptured their entrepreneurial spirit. There has never been any question that we have brilliant scientists working for us. GM was ranked No. 1 in The Patent Board’s list of innovators in the automotive and transportation industry for seven consecutive quarters. We also ranked second among all companies in U.S. In clean-energy patents granted since 2002, but that's not enough of this work has made it into our vehicles. We are unable to commercialize it.

That has changed faster than quite frankly I ever imagined possible. All it took was a common purpose and clear direction. The charge was simple, focus on outcomes that matter to customers and create a competitive advantage for General Motors. That same strategy also drives our investments in start-up and early stage companies through GM Ventures. And together, it is going to move us to the forefront of safety, connectivity and clean technology.

We are already building vehicles using new GM-invented and patent-protected aluminum spot welding technology. This innovation saves weight, cuts material costs and reduces capital investment by eliminating the need to use rivets when building aluminum hoods and doors.

I chose these behind the scenes examples because each of them is helping us to address our biggest challenges, which I group into three broad categories, material costs, complexity and quality. They’re all interconnected, they are all in our ability to control, and this leadership team will stay resolute in our determination to address and fix them.

The better job we do in keeping down our costs, rooting out complexity and pushing our quality ever higher and the more value we create for customers and for you, our owners is at the core of everything we do.

In closing, let me assure you one thing, the relentless drive to transform GM is always going to be a hallmark of this management team. As it does for any organization we want to get on top and we want to stay there. New challenges will inevitably arise for desire responsibility to anticipate them and meet them in order to build a GM that will be successful for generations to come. That is our ultimate goal. Thank you.

Let's begin the business portion of the meeting. A quorum is present. Therefore, this is an official meeting. Copies of the minutes of last year’s meeting are available at the information table in the lobby. We have five items to consider today, three from the board and two from stockholders, Assisting in the discussion will be other officers of the company seated here on the platform. To my right is Anne Larin, Corporate Secretary; Mike Millikin, Senior Vice President, General Counsel; Steve Girsky, Vice Chairman; Dan Ammann, Senior Vice President, Chief Financial Officer and Mary Barra, Senior Vice President, Global Product Development.

The polls have been open since we began soliciting proxies on April 25, and will remain open until the end of the today’s meeting. If you have not yet voted or want to change your vote on the proxy items please raise your hands now and our judges of elections will come and give you a ballot. We’ll make a final collection before adjournment.

As you can see from the stockholder, no I’m sorry -- if you are a stockholder and would like to address the meeting, we ask that you hold your questions or comments until the proxy items have been introduced and the general business discussion period begins. At that time, please report to one of the ushers or standing in the aisles and they will direct you to the microphone attended at the podium. With the ushers please raise your hand so the stockholders know who you are. Okay. Thank you.

We’d like to allow as many stockholders as possible to speak today. So please keep your comments brief and to the point. Each speaker will be allotted two minutes per turn in order to allow as many stockholders as possible to speak. Please address your questions to me and I will answer or ask one of our leaders here on the desk to handle it.

Personal matters such as individual stockholder count or employee relations issues or personal product complaints are not appropriate for general discussion. However, after the meeting you’ll have the opportunity to discuss your personal issues with company representatives who are available in the lobby. We may limit discussion on any one particular issue if it becomes repetitive and we ask that you wait until everyone wishing to speak on the topic at hand has had a turn before you speak a second time.

Now we will proceed with item one of the order of business which is the election of directors. Nominations for director are now in order. Anne?

Anne Larin

Mr. Chairman, on behalf of the Board of Directors I nominate persons whose names and biographical data appear on pages nine through 14 of the proxy statement.

Dan Akerson

Thank you, Anne. We received a written notice from a stockholder, [Mr. Love, Mr. John Love] within the dates specified in the proxy statement and he intends to make nominations for the Board. You will have three minutes to introduce his candidates. I will now recognize Mr. Love at the microphone.

Unidentified Speaker

Thank you. And I want to start-off by thanking the people that are responsible for us being here today. And that's the governments of Canada and the United States and those people have put great trust in the leadership of this company to fulfilling their obligation. And I think it’s meritorious of what they've done and it should not go unmentioned and unappreciated. There is two things I want to cover, one is corruption and I am talking about corruption with the China and Mexico. And the second one is product.

Dan Akerson

Sir, this is for your nomination of directors.

Unidentified Speaker

That's what I am talking about okay. This is what I would accomplish as a director. So if I can keep continuing here. John Love is my name and I appreciate your consideration of writing it in. I have stickers that you can put on your ballots to follow up on this. The corruption issue is China and Mexico. Both are corrupt governments and in order to do business in those countries, they have to deal with the corruption. The product, we need to improve the product. We're doing a lot of financial things and other things, but the basis from our entire operation is product. On the corruption issue, examples of that we’re counting cards, we don’t get any revenue. It was in the report last year that inflate our numbers. This Baojun car with Chevrolet and Chevrolet is supposed to be our leader in the world and we’ve created cost competitive to lift and help them to the Chinese. And in Mexico, people again, that’s a corrupt government. You have to pay to play down there.

I would start an investigation of each of these places and the government of the United States should not be supporting these kind of deals and we have directors that have experience with this; Admiral Mullen knows China and he knows about dealing with corrupt governments because United States has provided security, the largest heroin producer in the world in Afghanistan under Karzai. And then secondly, Schoewe at Wal-Mart knows about Mexico with Wal-Mart’s pay offs going on down there. So an investigation is what I would start.

And on product, I will give you examples of how the directors are not engaged in ways to improving. This isn’t the railroad or a phone company. Here product is what matters. And on the product, world class is average. We shouldn’t be average. We need to be the leader. And I’ve talked last year about the super seat, where you have belts, better belts for the driver, comfortable seats and we need to have a bench seat, all of our people aren’t small, we have large people who need to be accommodated in these vehicles. We need to fill product gaps, where our current vehicles, one is the Opel van that would help with our losses in Europe if we brought that into the United States and sold it. And the second one is Montana, which is in Brazil; it's an S10 and is the right size to be here in the United States to sell.

I’ve talked about these last year and I never received any kind of a reply from you about the presentation that I’ve made last year and as a director I would make a reply to the people that come here and give them accuracy. Also directors are provided vehicles for familiarization. The problem is when I looked at it last year, there was no one driving a Buick to become familiar with that product. No one was driving a pick-up truck, no one was driving Impala or lower priced vehicles. No one was driving Chevrolet SUVs that should be spread around so to really become familiar, because living with these vehicles makes a difference. And I would require that the dealers buy a car, the same way that executives are required or they receive vehicles. I have some more product examples.

Dan Akerson

Do you have any other nominees other than yourself?

Unidentified Speaker

Yes I do.

Dan Akerson

Would you please name them?

Unidentified Speaker

Sure, I’ll continue this later. John Love is my name, [John Shevaton] who I met at the audit meeting here and [Dean Fitzpatrick] who have a business that he started himself for employing people. Thank you.

Dan Akerson

Okay. Thank you, Mr. Love. We will now move on to the next item; item two in the order business is the Board of Directors proposal to ratify the audit committee selection of Deloitte & Touche as independent registered pubic accountants for 2013 as set forth on page 60 of the proxy statement. I will now entertain a motion for this proposal. Anne?

Anne Larin

Mr. Chairman, on behalf of the Broad of Directors, I move to adopt the following resolution that the stockholders of General Motors Company ratify the selection of Deloitte & Touche as independent registered public accountants to audit the books, record and accounts of the company and its consolidated subsidiaries and certain non-consolidated affiliates for the year 2013.

Dan Akerson

Thank you, Anne. We will now move onto the next proposal; item three in the order of business is the Board of Directors proposal for stockholders to approve on an advisory basis the compensation paid to the company's named executive officers as set forth on pages 60 and 61 of the proxy statement. I will now entertain a motion for this proposal. Anne?

Anne Larin

Mr. Chairman, on behalf of the Board of Directors, I move to adopt the following resolution that the stockholders of General Motors Company approve on an advisory basis the compensation paid to the company's named executive officers.

Dan Akerson

Thank you, Anne. The next items for consideration are the proposals submitted by the stockholders; the sponsors of each proposal have up to three minutes to introduce the proposal and offer supporting statements. There will an opportunity for comments on each proposal during the general business discussion period.

Item four on the order of business is the first stockholder proposal set forth on page 61 of the proxy statements submitted by [Mr. John Shevaton]. I will now recognize Mr. Shevaton’s representative to introduce the proposal.

Unidentified Speaker

Good morning Mr. Akerson. Behalf of Mr. Shevaton I am here today and intend to be here, a lot of familiar faces on the top GM salesmen of all the time. Mr. Shevaton called me to present his proposal because for many years I have been a proponent of a separate CEO and Chairman of General Motors. I think that the Chairman should look at the long term aspects of the company, have dinner with the President of China and maybe the President of United States and set the long term objectives of the company kind o like [Mr. Whittier], I like that guy, I wish he was still here. He liked [June] that’s a good thing.

But I think there should be a fellow that looks to the long term aspects of the company, separate from the person that run the day-to-day operations and while I’m here today I would like to put in the plug for [Mr. Mark Way], so, I think I see him in front of the company, I don’t know we agree with Mark and he knows that, he’ll be mad at me sometimes. But I think it would be good and I don’t dislike you sir. I think your vision and your long-term look at the company are good, but you can’t do all, this is a big company. So I think we should have one person that looks at the big range aspect of the company; and whether it’s Mr. Girsky, who not really in favor, nothing against Steve personally. But a person that looks at the long-term operation of the company, separate from the CEO that’s running the joint, when Alfred Sloan land at New York and we had [Charlie Martin] we did okay, we made money in the depression.

I have a plan and you may have a Board of Directors meeting here afterwards, if I could have two minutes of your Board of Directors time, I’ll tell you how to get rid of government motors and how to take our market share back to 25%. Right now I promise you. I am just going to read you the first paragraph and then I'm out of here. Today we are in the midst of a different called economy. We are attempting to increase our sales in a highly competitive automotive market.

Also, we are properly focused on being profitable. And as a priority in our stock, you know we are looking at higher sales and more profit, but it’s critical that we spend our marketing dollars efficiently and effectively. The purpose of our advertising must be to make the door swing and the phone ring. So how we're going to do it, how we’re going to bring people into our showrooms and get them behind the wheel of our products. I have a program called the Extra Mile. I talked to Joel Ewanick when he was here.

Unidentified Company Representative

You want to?

Unidentified Company Representative

Yes, sir. And (inaudible), but I've got a program, I'm your top salesman, I've earned history, Google me and look me up, and I can guarantee you, I'll take you back to 25% U.S. market share if I could have two minutes of your time, profitably. I know how to sell cars, but I'm here today on behalf of [Mr. Shiveden] and I want to echo again that I think we should have a separate CEO and Chairman of the Board. It’s too big for one guy to do both. We saw what happened with Mr. Wagoner, very nice man, I spoke against him you know business wise in the past, but I think we should have two people. Now seeing you are not the right guy, so maybe be Chairman, but [Mr. Royce] be CEO whoever it is, I'm not here to play party politics. But, that's my case and thank you for your time.

Dan Akerson

Okay, thank you very much. The Board of Directors recommends a vote against this proposal for the reasons set forth on pages 61 through 63 of the proxy statement. We will now move on to the next proposal. Item 5 the order of business is a stockholder proposal set forth on page 63 of the proxy statement submitted by [Joseph Barsotti]. I will now recognize Mr. Barsotti’s representative to introduce the proposal. Welcome back [Mr. Love].

Unidentified Speaker

Thank you, sir. Mr. Barsotti’s proposal is very simple. 25% of the stock that of the executives and people who receive is to be retained until they retire and the ones that let us in to the situation would not have been able even sell theirs with that requirement and they need to be engaged with this long-term outlook and this short-term failures is what we're dealing with and that’s one of the problems.

And as part of that, I would like to at least fulfill this requirement of talking about product. I talked about the directors’ familiarization with cards. There is other aspect of this. What I would like to see done is to have the 12 directors, each one be assigned a product to be a big brother for or sister so that they focus on that one. They can drive that product. They can focus in on that. So you have 12 people looking at it, so having at big mass of, I don't know what that is or I don't know what's going on.

I would require that they then view these sales brochures that are passed out at the dealerships and then talking of the dealers, they said well we only can get one shipment. Here, there is no ability to reorder. So if the car is popular, they can’t reorder the books. That’s a short-term kind of a method of saving money. There is a better way of saving money with these brochures and that’s not waste money on fold outs and lot of [spoof] pictures that don’t really explain the product.

We open the first page, it doesn’t even talk about the product and it's written in eligible print, white print on black that write in grey, I have examples here Buick, the Cruze that I am providing to you with my book. And so you get another book this time.

The other issue is, this Cruze, I bought a Cruze and I am very pleased with the car. It's an excellent car, it's a few things that need to be fixed though and I will align them. First off, my father was styling creative director at GM back during the Corvette creation. I had to be book the front of it, I just look too big and ugly. It didn’t have speed and style as they are in same thing in the back. It's photograph of that.

On the interior they put the heating and air conditioning controls in the ash tray. So like driving down the road, do you want to do anything if you haven’t gloves on and don't have a heated garage, you can't even figure out how to operate this.

Down below I have a photograph of my 86 Monte Carlos control which was excellent. So we lose these ideas that are excellent. Why does my Cruze have a 140-mile an hour speed limit, the speed number on my speedometer? That’s ridiculous Monte Carlos only had 85 and it makes it hard to read the numbers when you put so many numbers on the speedometer. Also the great ideas at GM that lost and died.

Dan Akerson

[Mr. Love] if you could explain to your fellow shareholders why you I think about the compensation because it changed?

Unidentified Speaker

Well, these are things that have taken place or examples for you. These examples demonstrate why by not having long-term thinking and doing that having that requirement, things are fallen to the cracks.

Dan Akerson

Thank you. It's fair point.

Unidentified Speaker

Last item here is the letter from our Cruze owner, I talk to the [inaudible] about her seat and I am going to give this to you and appreciate If you don't want to answer me that you at least have the kindness to answer her and deal with this issue.

Dan Akerson

Would you please give it to Pat who stand to your immediate left?

Unidentified Speaker

Hi, Pat. I would. Thank you, sir.

Dan Akerson

Thank you. The board of directors recommended vote against this proposal for the reason set forth on pages 63 and 64 of the proxy statement. We will now proceed to the next part of the meeting. If you marked your ballot, please hand it to one of our judges of elections, so it maybe recorded for the final count. Judges please pick up the ballots.

Okay. At this point of the meeting, I will take questions or comments from the audience. Please wait until everyone wishing to speak has had a turn before you speak a second time. I ask that each stockholder please keep your remarks brief and to the point and do not interrupt other stockholders. Speakers will have up to two minutes per turn. We are ready for the first question. The question at the table is right up here for those that you might be look forward.

Question-and-Answer Session

Unidentified Speaker

Mr. Chairman, my name is [Paul Marzac]; I live in Rochester, Michigan.

Dan Akerson

Good morning.

Unidentified Speaker

Good morning. You talked about several makes and models here and how great they were, but I think you missed one. My family has owned Malibu since 2004, the first one we put over a 140,000 miles on, the second one we bought in 2009 and put over a 50,000 miles on it and we traded it in when we went to the showroom unexpectedly to look at the 2013 model. We were very surprised and very pleased with the 2013 model. One of the problems we had was the seats were low and the passenger seat in the 2009 model. We were surprised to see a raise seat -- ability to raise the seat and electronic seat in the 2013, but we also when we drove it, we were quite surprised that the quiet ride was the insulated wheel, wells, the insulated windows that the car now has and the great interior that the car has. And I’d like to just congratulate you and thank you on a great 2013 Malibu. Thank you

Dan Akerson

Thank you and I’m sure that our engineers and design engineers who develop appreciate those comments.

Unidentified Speaker

Good morning Mr. Akerson.

Dan Akerson

Good morning.

Unidentified Speaker

I am concerned and let me push about there should be quality and the expansion. All the 4,000 generally shifts 36 are African America. 36 out of 4,000 were 18% to 20% of the margin. And as you look at the advertising budget, you will see the same basic breakout. We got the first item from dealership in 1966 40 plus year ago, that's a very slow progress.

Within Africa in the last couple of weeks and two years the African market will catch the growth and the Chinese market. Many traffic jams on the GM product in that marketplace. Seven of the 10 fastest growing economies in the world are in Africa. We seem to have no footprints in Africa. I can say that there are no dealerships in urban America where so many blacks live and there's a relationship between our share of consumer investment in the company and the term of my investment asking (inaudible); it comes to dealerships and advertising and the whole range of concerns, I think that this problem is still big and still wrong really to a need a kind of permission on African-American inequality in the marketplace. It’s been my experience that infusion needs to grow and there's growth everybody wins.

We raised this issue of our participation about dealerships for example. We are told that we can't get them because those have been in the brown and we were locked out altogether; a perpetual internal access pf the marketplace so the effort and excellence, do not compete without having some access. You must reassess how one gets into the business of selling these vehicles but more specifically how does one get to those who make decisions and how they come in the marketplace; because at the end of the day black American represents market, money call it then growth and then one is we are expanding business in China; I understand that because China is a growing market. We're right behind that growing market is after catch and surpass it within two years. So we have no manufacturing there to my knowledge and no footprint? Thank you, sir.

Dan Akerson

Okay. Just briefly, two separate issues. As far as Africa, we have manufacturing in South Africa, Kenya and Egypt and you are right, we have it developed. We had it one time dealerships in emerging markets such as Nigeria, Angola and others and it's something we will look at it.

Unidentified Speaker

We're raising Nigeria issue frankly, is that 175 million Africans in Nigeria are one of every four Africans. Its wing span touches one-half of all of African population, exploding in growth, the biggest two revenue producing markets for Delta and United is non-stop from Atlanta to Lagos, Delta and the non-stop United to Lagos by United and by United. So I think that while we are hesitating about that marketplace, that the markets in stability is growing, and China is investing in infrastructure, road, railroads, the whole energy and whole range of things, we seem to be looking out of the African market of the lenses, lenses are kind of building our consciousness as of what's available in the fastest growing market in the world? Thank you.

Dan Akerson

Thank you.

Unidentified Speaker

Good morning Mr. Chairman. My name is [Damien Ruster] I am a stockholder and I am also the President of NAMAD, which is the National Association of Minority Automobile Dealers. Here, today as a stockholder as well as the head of the association to bring to this Board as well as the rest of the stockholders attention to the state of minority dealers within the General Motors family.

From a goal’s perspective, General Motors is fourth from the bottom, which is less than 5% representation within already OEMs in United States. We raised this concern as to the point we understand of the brand elimination status of (inaudible) and Pontiac, but we also want you to understand that in order for your model of everything starts and ends at great products, but also starts and ends with great dealers; particularly a diversity dealer and as General Motors has suffered tremendously with the disproportionate decline within this African-American dealer body of which is about 36 out of the 35, 38,000 deals, so we urge you to come up with a strategy, global strategy that encompass all types of diversities all forms away from marketing, dealerships, philanthropy and so on and that strategy needs to be in writing and at least have a plan and a way that we can execute it.

We also urge that there if the board consider that you have external diversity committee representative of different areas similar to this board and we’ve found that and with another manufacturers they have been successful as that strategy has been able to being held to more and more accountable from the external committee and held leadership and co-leadership accountable as well. Those are my remarks. Thanks.

Dan Akerson

Thank you. Since I know you represent all minority dealers, there are 198 minority dealers in our universe and its inadequate to understand that both Mark Reuss and I meet with the minority councils I think by annually. And we are making progress; I won’t argue that we need to make greater progress. Thank you.

Unidentified Speaker

Mr. Akerson, I want to thank you for welcoming to your meeting today. [Mr. Jackson], I spoke right after you seven or eight years ago at the Hotel du Pont and you called for minority dealership to be formed in, how long they did, (inaudible) called for you keeping the Buicks City plant open and we didn't do that but you had success Mr. Jackson and I respect all that you have done for this country, its great, sir.

I am here today to help this company, (inaudible) stones but you know there is nothing better than constructive criticism. Now I am going to tell you which are doing wrong, I’ll tell you what I think you should be doing better and how we can do it. I have an idea, I am a creative sort, of how we can get rid of the government motors monitor; how we can sell at lot more price right now take as 5% of the market share, I have been preaching this Mr. Reuss has heard me from before. We will give Mr. (inaudible) there, with lot more money to take that to 23, Mr. Girsky, take your buddy’s back and it sounds more money than they could ever imagine, if we do this thing the right way.

So anyway, the purpose of advertising is to make the phone ring and the door swing; how to put people behind the wheel of the cars that we have for sale, without spending money how can we be more profitable and how can this company do better? I have some ideas, I am not going to sit here and announce it in the public because this is kind of confidential. I will take two minutes your board of directors’ time this afternoon or I will talk you personally, if you have a moment for my time. If you don't like what I have to say, I will go away; god bless you and thank you for your time.

Dan Akerson

Thank you.

Unidentified Speaker

Good morning. My name is [Agnasio Salasara], I’m the President and CEO of a national non-profit organization called [Sarah Johnson Progress]. I’m here representing [Jane Garcia] who was come before this board many times and we are here for a couple of reasons. My organization is a footprint in 18 states and in Puerto Rico we touch over million lives annually through a variety of employment and training programs. Our emphasis is obviously in the Hispanic population and that’s what I want to touch on. But first I want to say thank you, thank you for what you do, do and giving back to the community and for touching their lives and so many, to individuals like [Joe Bonze] who sits in our National Board of Directors, to individuals like [Eric Peterson] who has addressed our National Conference before and many individuals in the corporation that do work in the community. So we do appreciate that and we thank you for that.

As you know the demographics for this nation are changing dramatically. The number of lives in this country, there is over 50% today that are Hispanic and Latino and that’s driving that the nation in a different direction. Of the next 100 million people added, the population of 60 million will be Hispanic-Latino. So when you consider the Hispanic-Latino and African-American population of this country, that’s the future, the biggest future for this corporation. So it’s important to continue to address that and to invest in that.

I want to say thank you for everything you do, do and remember that we are here to help who are interested in this corporation and is a way of showing that I do care, I want you to know that last month I did purchase one of those Cadillac XTS, and it’s a beautiful car. And thank you for everything you do and continue to do, diversify and move this corporation forward. Thank you very much.

Dan Akerson

Thank you.

Unidentified Speaker

Yes, good morning, it's [Ben Hart]. I want to thank you for being GM CEO. The results speak for themselves, please stick around. You are doing a great job. You've made some tough calls. They are not easy. You've done more right than wrong. Nobody is a 100%. The lady on the left I reviewed your background, you are a great addition to the board, just great. And one comment that I heard from [Jessie Jackson], I would like to say that it’s not the shareholders’ responsibility to just heave money at minority dealerships to get them up and running. There is money in Chicago itself, Oprah Winfrey is one example and assuredly wealthy lady. She can fund dealerships. Running a dealership is a tough business and she may lose her money, but that private capital go in there, its not shareholders that supposed to, you know cause of all these bucks. The other one, the small one I saw on the annual report that the GM factory for transmissions in Strasbourg, France is going to be sold off. Would you happen to know who is picking that one up?

Dan Akerson

We sold it to an intermediary for ZF which is one of the big European transmission companies. They will make it for them, but we -- yes we sold it.

Unidentified Speaker

Okay, all right. Keep doing a good job.

Dan Akerson

Thank you.

Unidentified Speaker

Hello, Mr. Akerson. My name is [Alice Baylor] and resides in St. Clair Shores, Michigan. I'm a financial advisor and my clients are reluctant to purchase a GM car or invest in GM stock until the taxpayers have been totally repaid. I wondered if you could elaborate on the plans to do that.

Dan Akerson

First of all, we paid back all of our debt. That’s what we owed. We paid back all of the preferred. The stock is equity and that’s ownership in the company is not in financial planner. That’s not debt. This is a conversation that was argued on a National debate four, five years ago. Two administrations with radically different point of view saw the wisdom of saving the company that was central to the manufacturing base of this country and notwithstanding all of the criers of how bad things are, the U.S. manufacturing base is still 50% larger than China’s today after the great recession.

To have forgone that manufacturing base with the associated social impacts and cost of unemployment, social disruption, the government in their wisdom and I agree it for prior speaker, it was a wise move. I wouldn't be here. I am not a lifetime GM employee, you know. Mine was a selection or a decision after this controversial move that four years afterwards, it's pretty hard to argue it wasn’t successful. You could have debated it upfront, fair but at some point in time, you’re entitled to your opinion but not your facts. $25 billion in profits later, growing employment and a strong manufacturing base and the first time in more than a generation that all three manufacturers were profitable speaks to was it a wise decision. It's not, there is also a huge pension deficit of $26 billion, it would have gone on the government’s books, PBGC. So rather than engaging, was it the right decision. We're trying to deliver the best we can. I think we've done a credible job, not an incredible, a creditable job, and I think in the end net-net the American public were well served by decision that was difficult for two different Presidents of different perspectives.

Unidentified Speaker

Thank you.

Dan Akerson

Thank you.

Unidentified Speaker

I had one question for the auditors and it is not able to do it when you are discussing it. (Inaudible) in the annual report and explain that General Motors was not receiving revenue for cars that they count is being sold in China? And I didn’t see that note again in the annual report this year and I just wondered why these procedures continuing and how the auditors can justify it?

Dan Akerson

Well, I will ask the auditors to clarify I think I’d to say, but we do not consolidate our China operation. Therefore, no revenue shows up on the topline that’s generally accepted accounting practice and we just below the operating income come in for other investment that is not part of our core operations because under the rules of accounting you can't consolidate unless you control.

We owned 50% and the tests are clear. We do not have a control position, therefore we don't consolidate. But the profits come back here. I hope that is clear. I’d also add that nor do any dollars come out of the United States of America or Europe and U.S., China is the self-contained, self funding from research, development, manufacturing, the whole nine yards, development is out of China. And what we do provide technical assistance we gain back by royalties, which also show up lower operating income line.

Unidentified Speaker

Is that $1 billion Cadillac factory is that from their revenue?

Dan Akerson

That’s from the joint ventures revenue.

Unidentified Speaker

So we contribute to that or don't?

Dan Akerson

Yeah, what we do, our China operation generate that cash. We pay all of the salaries, the capital, R&D, then we split the revenue, pay the taxes and we ship at back here, I think we got about a $1.7 billion to $1.8 billion last year that comes back and goes into the general [coffers] after we funded everything in China as a standalone operation.

Unidentified Speaker

Thank you, sir.

Dan Akerson

Okay, thank you all for your contributions, your comments, your constructive criticisms; I take them all the heart. The polls are now closed. Anne, could you give us a preliminary voting result?

Anne Larin

Mr. Chairman, for the first item election of directors, on the preliminary basis each of the directors identified in the GM proxy statement received at least 75% of the vote cast and has been elected a director. For the second item, ratification of Deloitte and Touche on a preliminary basis 98.5% of the votes cast for the proposal, 1.2% were against and 0.3% at abstained. Therefore on a preliminary basis, the proposal is approved.

For the third item, advisory approval of executive compensation on the preliminary basis, 98.2% of the votes cast were for the proposal, 1.3% were against and 0.5% abstained. On the preliminary basis the proposal was approved. For the fourth item, the stockholder proposal on independent board chairman, on the preliminary basis 35.5% of the votes cast were for the proposal, 63.2% were against and 1.3% were abstained. Therefore on a preliminary basis this proposal is not approved. For the fifth item, stockholder proposal on executive stock retention, on a preliminary basis, 19% of the votes cast were for proposal, 80% were against and 1% abstained. Therefore on a preliminary basis, this proposal is not approved.

Dan Akerson

Thank you, Anne. We will provide the final voting results in the few days on our website in a Form 8-K filed with the SEC. There being no further business to come before the meeting, I declare the fourth Annual Meeting of General Motors stockholders adjourned. I will not have that two minutes [Mr. Dalinger]. I’m going to meet with the media here briefly before we resume our Board Meeting. Thank you all for coming. Thank you for your loyalty and your support.

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