GM Objectives 2003
GM Outlines Objectives for 2003
- $5.00 earnings per share, excluding Hughes and special items
- $10 billion cash generation
- Improved market share in all regions
DETROIT, Jan. 9 /PRNewswire/ -- General Motors Corp. (NYSE: GM, GMH) today
said it is pursuing a strategy to generate long-term profitable growth through
its continued worldwide product offensive, and by further leveraging the
strength of its product development, manufacturing, purchasing, quality and
distribution capabilities.
'GM's long term strategy for creating stockholder value is clear. We're
focused on executing a global plan to win more market share, improve our
profitability, and capitalize on new opportunities to grow our automotive
business in both developed and emerging markets,' said GM President and Chief
Executive Officer Rick Wagoner, at a meeting of securities analysts and
institutional investors during the North American International Auto Show
here.
'We're achieving solid operational improvements by leveraging our
strengths in product development, manufacturing, purchasing, quality and our
global sales footprint. Over the last several years, GM has demonstrated
steady and significant improvement in our core operations. We have developed
an extremely strong position in trucks and sport utility vehicles, and
embarked on a remarkable resurgence at Cadillac,' Wagoner said.
'Additionally, we've established important and solid footprints in key growth
markets such as China and Korea. In 2003, we're going to pick up the pace and
build on our excellent operating base to capitalize on market opportunities
around the globe,' Wagoner said. 'We know what to do and we're planning to
'go fast' in accomplishing our objectives.'
GM Vice Chairman and Chief Financial Officer John Devine outlined the
company's 2003 financial goals. This year, GM expects to earn $5.00 per share
of GM $1-2/3 par value common stock, excluding Hughes and special items,
generate $10 billion in cash and improve market share in all four automotive
regions.
'The key to achieving these goals is great products,' said Devine. 'Our
increasingly competitive products and cost structure will position us for
long-term improvement in our financial performance.'
GM North America is expected to earn approximately $1.7 billion to $1.9
billion in 2003, and GM Europe is expected to report improved financial
results, in a range of break-even results to a loss of about $200 million.
GM expects 2003 industry sales to be down modestly in the North American
and European markets, at 19.4 million and 19.0 million respectively; up again
in the Asia Pacific region at about 15.0 million units; and unchanged in the
Latin America Africa Mideast region at 3.7 million units.
'Pricing pressures are expected to continue in the North American and
European markets in 2003,' Devine added.
GM will continue to support its product offensive with total capital
spending of about $7 billion in 2003. Net material cost reduction for GM
North America is targeted at 3.0 percent, and for GM Europe at 3.5 percent.
For North America and Europe, GM is also targeting carryover structural cost,
excluding pension expense, reflecting strong cost performance that will
effectively offset increases in health care expense and economics. The strong
material and structural cost performance expected in 2003 is on the heels of
strong performance in 2002.
GMAC expects another record profit in 2002, marking the eighth consecutive
year of earnings growth at the wholly owned finance subsidiary. For 2003,
GMAC expects another year of strong results, with net income targeted at $1.7
billion to $1.9 billion. In addition, GMAC's goal for 2003 is to again remit
a dividend to GM while maintaining its funding-to-equity leverage ratio
roughly in line with current levels. GMAC paid a $400 million dividend to GM
during the fourth quarter of 2002.
Strengthening GM's balance sheet continues as a priority in 2003. A
significant factor affecting GM's 2003 financial performance will be increased
pension expense, which is expected to rise to about $3 billion in 2003, before
tax, from about $1 billion before tax in 2002. Strong cash generation in 2002
allowed GM to contribute a total of $4.8 billion to its U.S. pension plans
during the year, including a $2.6 billion cash contribution in the fourth
quarter.
A preliminary analysis of GM's U.S. pension plans showed that the plans'
underfunded status was approximately $19.3 billion at the end of 2002, based
on a 2002 asset return of approximately negative 7 percent, and a discount
rate of 6.75 percent. The discount rate, which is used to calculate the
present value of future pension liabilities, was reduced from 7.25 percent in
2002. GM's U.S. pension plans were underfunded by $9.1 billion at the end of
2001. Based on a comprehensive study by GM's asset managers and actuaries, GM
has decided to reduce its asset earnings rate assumption to 9 percent in 2003
from 10 percent in 2002.
In this press release and related comments by General Motors management,
our use of the words 'expect,' 'anticipate,' 'estimate,' 'forecast,'
'objective,' 'plan,' 'goal' and similar expressions is intended to identify
forward looking statements. While these statements represent our current
judgment on what the future may hold, and we believe these judgments are
reasonable, actual results may differ materially due to numerous important
factors that are described in GM's most recent report on SEC Form 10-K (at
page 11-15, 16) which may be revised or supplemented in subsequent reports on
SEC Forms 10-Q and 8-K. Such factors include, among others, the following:
changes in economic conditions, currency exchange rates or political
stability; shortages of fuel, labor strikes or work stoppages; market
acceptance of the corporation's new products; significant changes in the
competitive environment; changes in laws, regulations and tax rates; and, the
ability of the corporation to achieve reductions in cost and employment levels
to realize production efficiencies and implement capital expenditures at
levels and times planned by management.
Note to editors: General Motors will webcast its meeting with automotive
securities analysts on Thursday, Jan. 9, 2003, from approximately 8:30 a.m.
EST to 11:30 am EST. The presentation will be available live through GM Media
Online ( http://media.gm.com ), or directly at http://investor.gm.com under
the Events and Presentations section. A replay of the webcast will also be
made available.
Presentation materials will be available under Recent Presentations in the
Event and Presentations section.
Additionally, media may access the presentations via a live conference
call (Listen Only). Dial-in access will begin at 8:00 a.m. EST. To access
the conference call, please dial 1-888-428-4471 (612-332-1025 for
international access) with confirmation #667309 and ask to be connected to the
General Motors conference call.
A taped replay of the call will be made available from 8:00 p.m. EST,
January 10 until 11:59 p.m. EST, January 12, 2003. Please dial 1-800-475-6701
(320-365-3844 for international access) and enter reservation number 667309 to
access the taped replay.
SOURCE General Motors Corporation
-0- 01/09/2003 P
/CONTACT: Toni Simonetti, +1-212-418-6380 (Office), +1-917-822-3392
(Mobile), toni.simonetti@gm.com , or Jerry Dubrowski, +1-212-418-6261
(Office), +1-917-544-4885 (Mobile), jerry.dubrowski@gm.com , both of General
Motors Corporation/
/Web site: http://media.gm.com /
/Web site: http://www.gm.com /
(GM GMH)
CO: General Motors Corporation
ST: Michigan
IN: AUT
SU: ERP TDS
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