General Motors Details Restructuring Progress At Annual Meeting
General Motorsis making progress in its turnaround effort, the automaker's chief executive said at its annual meeting, where all 10 shareholder proposals were rejected.
Speaking to investors CEO Rick Wagoner said GM , which lost more than $12 billion in the past two years, had made "major progress" in its restructuring -- a plan that includes slashing more than 34,000 jobs and closing 12 plants.
GM cut structural costs by $6.8 billion in 2006 and Wagoner told shareholders the automaker is on track to reach its target of cutting those costs by an additional $2.2 billion this year.
He said this year's priorities included concluding a deal to allow former parts subsidiary Delphi to emerge from bankruptcy and cutting its own health-care costs, which he said were "a staggering $4.8 billion" in 2006.
Speaking to reporters after the meeting, Wagoner said he was optimistic that a settlement with Delphi could happen sooner rather than later. "My sense is it's kind of coming together," he said. "The number of issues is narrowing. It's in everyone's interest to get it done as soon as we can."
GM has been in negotiations with Delphi and the United Auto Workers union since late 2005 over a range of issues centered on contractual terms for the unionized work force of the parts supplier as it emerges from bankruptcy.
A work stoppage at Delphi has been seen as a lingering risk to GM because it could shut down GM plants and force the automaker to burn through billions of dollars a week.
GM's shares, which lost 50% of their value in 2005, rose 58% last year, the biggest rise in the Dow Jones Industrial Average.
Investors gained confidence in the automaker's turnaround as its annual net loss narrowed to $2 billion from $10.4 billion in 2005. Shares are up about 2.4% so far this year. "For 2007, we're building on and accelerating our progress," Wagoner said.
In response to a question, he said GM had no plans of going private like smaller rival Chrysler Group, which in May accepted a $7.4 billion takeover offer from Cerberus Capital Management.
However, Wagoner did indicate in response to another question that a partnership between GMAC, GM's former finance arm, and Chrysler's finance unit was a possibility.
"There haven't been any extensive conversations at this point...," he said. "It is a possibility but not a certainty."
Cerberus also owns a 51% stake in GMAC, with GM retaining 49%.
Shareholder Proposals Rejected
GM investors rejected all 10 shareholder proposals at the meeting, including one that would have allowed investors with more than 10% of GM stock to call special shareholder meetings. That proposal received the most preliminary votes, about 41%.
A proposal to allow investors to multiply the number of shares they own by the number of board candidates and cast that greater number for just one person garnered only about 26% of preliminary votes this year.
That proposal received more than 50% of votes last year.
A proposal that called for management bonuses to be recouped when the company restates financial results downward received only about 11% of preliminary votes.
The preliminary tally represented 82% of the eligible votes, GM said.