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General Motors 1 A- HISTORY: General Motors Corporation (GM), one of the world's largest manufacturers of automobiles and trucks was founded in September 16, 1908 in Detroit, Michigan, as a holding company for Buick, then controlled by William C. Durant, and acquired Oldsmobile later that year. The next year, Durant brought in Cadillac, Elmore, Oakland and several others. In 1909, General Motors acquired the Reliance Motor Truck Company of Owosso, Michigan, and the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessors of GMC Truck. Durant lost control of GM in 1910 to a bankers' trust, because of the large amount of debt taken on in its acquisitions coupled with a collapse in new vehicle sales. A few years later, Durant would start the Chevrolet Motor car company and through this he secretly purchased a controlling interest in GM. Durant took back control of the company after one of the most dramatic proxy wars in American business history. Shortly after, he again lost control for good after the new vehicle market collapsed. Alfred Sloan was picked to take charge of the corporation and led it to its post war global dominance. This unprecedented growth of GM would last through the late 70's and into the early 80's. INTRODUCTION: General Motors Corporation and its subsidiaries engage in the development, production, and marketing of cars, trucks, and parts worldwide. It offers small, midsize, sports, and luxury cars; and pickup, van, utilities, and medium duty trucks It also provides a range of financial services, including consumer vehicle financing, automotive dealership and other commercial financing, residential mortgage services, automobile service contracts, personal automobile insurance coverage, and commercial insurance coverage. In addition, the company offers after sale services, such as maintenance, light repairs, collision repairs, and vehicle accessories. General Motors markets its products through distributors a General Motors designs, builds, and markets cars and trucks worldwide. In 2005, GM sold nearly 9.2 million cars and trucks, the second highest sales volume in our history. GM has manufacturing operations in 33 countries and sales operations in 200 countries. General Motors has a long tradition of success and innovation within the automotive business, which was founded in 1908. Today the company's global headquarters are at the GM Renaissance Center in Detroit, Michigan, USA. GM's business units are located in North America (GMNA), Europe (GME), Asia-Pacific (GMAP), and Latin America, Africa and the Middle East (GMLAAM). .GM, American Multinational Corporation, is the world's largest auto company by production volume for the first 9 months of 2007, and by sales volume for 76 consecutive years Hailey College of Banking and Finance General Motors 2 GM sells about 24 percent of all cars and trucks in the United States and about 15 percent of all cars and trucks in the world. Based in Detroit, Michigan, GM is the largest corporation in the United States based on overall sales. As of December 31, 2006, it had 7,000 vehicle dealers in the United States, 750 in Canada, and 300 in Mexico, as well as approximately 15,800 distribution outlets. In addition, GM has a 100 percent equity stake in Saab Automobile AB of Sweden and owns the bulk of the automotive assets of the Daewoo Motor Company in South Korea. It also has a strategic alliance with Fiat in Italy and a joint venture with the Shanghai Automotive Industry Corporation in China. GM also builds locomotives for railroads. B- GM's Vision & Values: General Motors' vision is to be the world leader in transportation products and related services, earning our customers' enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people. GM has defined six core values to guide our employees' conduct in their day-to-day business across global operations: • Continuous improvement: We will set ambitious goals, stretch to meet them, and then ―raise the bar‖ again and again. We believe that everything can be done better, faster, and more effectively in a learning environment. • Customer Enthusiasm: We will dedicate ourselves to products and services that create enthusiastic customers. No one will be second guessed for doing the right thing for the customer. • Innovation: • Integrity: We will challenge conventional thinking, explore new technology, and implement new ideas, regardless of their source, faster than our competition. We will stand for honesty and trust in everything we do. We will say what we believe and do what we say. • Teamwork: We will win by thinking and acting together as one General Motors team focused on global leadership. Our strengths are our highly skilled people and our diversity. • Individual Respect and Responsibility: We will respect others and act responsibly, so that we can work together to meet our common goals. Hailey College of Banking and Finance General Motors 3 Our company is based on these fundamental values. We have adopted and endorsed principles, such as the GM Environmental Principles and the Global Sullivan Principles that are consistent with these values and serve to inform our strategies. These strategies drive our behaviors and actions, which produce the results that matter. The guidelines are important not just for compliance — with the law and with GM's policies — but also for aligning with GM's core values. The foundation for all conduct by GM and its employees is the core value of integrity, and Winning with Integrity deals with personal integrity, integrity in the workplace, integrity in the marketplace, and integrity in society and communities. The guidelines, available online through GMability.com, explain GM's policies and present examples of situations that employees might face with suggestions on how to deal with them. C- The Mission of the General Motors Board of Directors: The General Motors Board of Directors represents the owners' interest in perpetuating a successful business, including optimizing long-term financial returns. The Board is responsible for determining that the Corporation is managed in such a way to ensure this result. This is an active, not a passive, responsibility. The Board has the responsibility to ensure that in good times, as well as difficult ones, management is capably executing its responsibilities. The Board's responsibility is to regularly monitor the effectiveness of management policies and decisions including the execution of its strategies. In addition to fulfilling its obligations for increased stockholder value, the Board has responsibility to GM's customers, employees, suppliers and to the communities where it operates -- all of whom are essential to a successful business. All of these responsibilities, however, are founded upon the successful perpetuation of the business. Executive sessions of the board The independent directors of the Board meet regularly in executive session. The presiding director at these sessions is the Chair of the Directors and Corporate Governance Committee, who is elected by the independent directors. At these sessions, at a minimum, the independent directors review CEO succession, performance and compensation; strategic issues for Board consideration; future Board agendas and the flow of information to directors; management progression and succession; and the Board's corporate governance guidelines. Hailey College of Banking and Finance General Motors 4 D- Brands and Partners: Since the 1920s, GM has been driven by strong, distinctive brands. Our success in the marketplace is directly related to innovative products that meet and exceed our consumers' expectations. Going forward, we're putting great emphasis on building and differentiating each of our automotive brands around the world, and accelerating our drive for consistent, world-class distribution networks. GM's brands: The company sells its products under the Brand names in Canada, Europe, Latin America, and Asia Pacific. E- Market Status: Approximately 9.17 million of General Motor cars and trucks were sold worldwide in the year 2005. In the same year the sale of Chevrolet exceeded their competitor Ford Motor Co. after a long period of 30 years. In 2006 the revenue and net income of General Motors, USA were remarkable and are given below Revenue $207.349 Billion USD (2006) Net income $1.978 Billion USD (2006) Market field of General Motors United States China Canada United Kingdom Germany In Strategic Vision's Total Quality Index, General Motors tops the chart. Hailey College of Banking and Finance General Motors 5 Other services GMAC Financial Services: It provides finance and insurance for automobiles, residences and for commercial purposes. On star: A subsidiary of General Motors offers service for vehicle safety, security and information. GM Parts and accessories are marketed as GM, GM Performance Parts, GM Goodwrench and ACDelco . GM engines and transmissions are sold under the brand name GM Powertrain. Other accomplishments of General Motors General Motor has wide history in racing. Chevrolet Corvette has long been most popular in this field. One of the 100 Best Companies for Working Mothers in 2004 [by Working Mothers magazine] GM made extensive research on alternative-technology in vehicles and offered environment friendly Flex Fuel vehicles that can run on either ethanol or gasoline Presented the world's first full sized hybrid pickups like Opel Astra and 2006 Saturn VUE Green Line F- Research and Development: R&D Organization Overview GM has a global R&D network of Science Offices and Collaborative Research Laboratories in various regions of the world that give GM access to key technology resources and scientific expertise. This network of scientific expertise expands GM R&D's capabilities and reach and ensures GM leadership in strategic technologies. Headquartered at the GM Technical Center in Warren, Michigan, the R&D network involves seven sciences labs, including one in Bangalore, India. Science Labs Chemical & Environmental Sciences Lab (CES) Electrical & Controls Integration Lab (ECI) India Science Lab (ISL) Manufacturing Systems Research Lab (MSR) Materials & Processes Lab (MPL) Powertrain Systems Research Lab (PSR) Vehicle Development Research Lab (VDR) Hailey College of Banking and Finance General Motors 6 Other R&D Organizations Business & Technical Operations Global Strategy Group Global Technology Management Technology Collaboration Research activities include improving environmental performance of GM's vehicles, diversifying energy sources, and providing gasoline-saving solutions around the world like active fuel management, variable valve timing and sixspeed transmissions, advanced diesel engines, fuel cell and hybrid vehicles, electronics and controls and advanced materials. GM generates and holds a significant number of patents in a number of countries in connection with the operation of GM's business. These patents are very important to GM's operations and continued R&D leadership. Hailey College of Banking and Finance General Motors 7 GM's Human Resource Aspect: Hailey College of Banking and Finance General Motors Communicating values to employees 8 In the preface to "Winning with Integrity — Our Values and Guidelines for Employee Conduct," GM's Chairman and CEO Rick Wagoner states: GM team Members: The pace of change at GM has never been faster, and it won't slow down any time soon. As we launch this annual update of our guidelines for employee conduct, Winning With Integrity, now is a good time for all of us to reflect on things that do not change at GM: our core values. They are constant. They are the foundation that we stand on in conducting business. Winning With Integrity is a cornerstone of our commitment to those values, starting with the core value of integrity. Integrity is not optional at GM. We live it every day. It guides our decisions, our work, and our commitment to correct mistakes when we spot them. It guides us whether the company is riding high or battling through tough stretches. Integrity transcends borders and language; it's all about promoting a culture that demands and supports proper business conduct. Doing the right thing day-in and day-out is essential to our reputation and our success. Operating with integrity means honest and accurate reporting of our performance, both internally and externally. It means careful attention to our internal controls and policies. It means understanding our legal responsibilities, and complying with them. In short, it means competing by the rules and making sure that our actions match our words. This publication, Winning With Integrity, sets out the policies and obligations that help guide our business conduct worldwide. Steps taken by the GM's HR department in order to satisfy its employees and improve the performance of the company are as followed: Employee Satisfaction There are a number of challenges GM faces to deliver a successful Employee Enthusiasm Strategy. Most important among these is the diversity of the global workforce. GM employees have their own interests and personal circumstances that make them unique. However, this makes managing GM's culture and engaging all the employees particularly challenging. GM Addresses these challenges by setting a framework globally that can be interpreted locally. Initiatives GM recognizes that overcoming these challenges is very rewarding for its employees and the company there is a clear link between investment in human performance and market performance and financial results. Hailey College of Banking and Finance General Motors 9 Creating A Performance Culture GM has embraced four priorities to create its unique performance culture: • Focus on the customer – create products that exceed customers' expectations • Act as one company – leverage the strengths of the global team, drive common best practices and accelerate knowledge transfer • Embrace stretch targets – reach for goals beyond what is thought possible • Move with a sense of urgency – drive significant speed into the business. Staff Survey For more than 60 years, GM has routinely asked its employees how they feel about their jobs and the company. In 2005, a web-based ―Pulse‖ survey was initiated to gauge salaried employees' sentiments about the North American Turnaround Plan. Every other month, 1500 randomly sampled salaried employees in Canada, Mexico, and the United States are asked about the four key initiatives of the Turnaround Plan. The initiatives are: • Continuing to raise the bar on execution of new products. • Revitalizing the sales and marketing strategy in the U.S. • Really picking up the pace on reducing cost and improving quality. • Addressing the health care burden in the U.S. Staff Survey results Over 9000 salaried employees in North America were given the opportunity to participate in a North American Turnaround Plan survey during the past year. Initial findings from September 2005 revealed that at least half of the employees surveyed had a clear understanding of the four key initiatives. In addition, a majority of employees reported that they are frequently engaged in activities that support each of the four initiatives. For example, a majority of employees promote sales of GM products among family, friends, and their community. Over time, more salaried employees believe that GM as a whole is well managed (+20 percent), and that GM is making the changes necessary to compete effectively (+34 percent). Action resulting from the Survey Leadership continues to refine the amount and type of information on the North American Turnaround Plan based on findings from the Pulse surveys. Frequent inputs from employees allow for real-time course corrections Facilities provided by GM to its employees are as follows: Wages & Benefits GM's policy is to provide competitive, market-based compensation that meets or exceeds all legal requirements. Health care is provided in Hailey College of Banking and Finance General Motors 10 accordance with local laws, customs, and competitive practice. Outside the U.S., health care is typically provided as a social benefit through governmental institutions. Wages and Employment For wages and employment numbers, please refer to pg. 58 in the 2005 GM Annual Report at. Pensions GM sponsors a number of defined benefit pension plans covering substantially all U.S. and Canadian employees, as well as certain other nonU.S. employees in Germany, Belgium, the United Kingdom, Mexico, South Africa, Australia, and Hungary. The benefits provided by the plans covering employees are generally based on years of service, and in some cases, compensation history. GM's funding policy with respect to its qualified pension plans is to contribute annually not less than the minimum required by applicable law and regulations, or to directly pay benefit payments where appropriate. Legal Compliance Conditions attached to wages, benefits, hours worked, and other working conditions comply with the relevant legislation and are managed through the collective bargaining process, where applicable. Internal employee representation systems are established in all countries in which GM operates. The company's compensation General Motors 2005/06 Corporate Responsibility Report 5-2 and benefit plans meet or exceed all relevant legal requirements. Health Care Health care is a major discretionary cost for the company in the U.S., but not in other countries, largely because employees in most other countries where GM operates receive health-care benefits directly through government programs, to which GM contributes as appropriate. In the U.S., GM provides its employees with various health care options, including health maintenance organizations (HMO), preferred provider organizations (PPO), and indemnity plans. General Motors' Recent Success In Going e-HR General Motors, internationally known as the world's largest manufacturer of automobiles, today likes to tout itself as an e-commerce company that just happens to build cars. From consumer web sites to business-to-business portals linking the company with its vast universe of suppliers, GM has taken to the Internet with a vengeance, even creating a special e-GM unit to lead the charge. Hailey College of Banking and Finance General Motors 11 Internally, some of the company's efforts have focused on e-HR -- HR programs that seek to push as many HR-related activities as possible into an online environment. The company's four-year-old intranet site -- where employees once linked to 85 different GM-related sites providing information on everything from retirement accounts to flexible benefit enrollment -- has been transformed into an HR portal. As with every major corporate technology initiative, GM's portal project will be an ongoing endeavor. The launch represents the beginning stages for the portal, which now delivers customized content to two classes of employees but will, in the future, provide it to several levels. In pursuit of this goal, GM's information technology (IT) staff has been working hard to "portalize" data so it can be directed to the appropriate pool of employees. The GM Portal The idea behind e-HR and what GM calls the "Employee Service Center" part of the portal is "part of an overall transition that will help focus HR on more strategic, consultative, and operational issues, and less on transactional issues," according to Katy Barclay, Vice President of Global Human Resources at GM in Detroit, Michigan, USA. "The portal will further our goal of a websavvy workforce and enhance our ability to communicate and collaborate with one another." The Employee Service Center does this by cutting out HR as the middleman, and allowing employees to directly modify their HRrelated information. In devising a portal to help employees navigate GM's digital mountain of information, GM decided to create a role-based environment in which an hourly employee will see different information on the screen than a salaried one. A role-based portal allows GM to deliver customized information to different audiences, a salient advantage in a company with an employee population larger than many U.S. cities. As the portal evolves, more roles will be added, but it made sense to start first with the two major compensation groups at GM. E-Information In GM The portal,My Socrates offers tailored messages to different GM audiences on the front page and gives users a large menu of information options -- such as reading e-mail, viewing a message from the company's chief executive office, learning about a new program, changing their addresses, creating a personal profile, and seeing their pay stubs. On the HR side, much of what once required paperwork and perhaps a visit with a supervisor or HR now takes place on My Socrates. Another major advantage that the new portal offers (and that the previous intranet site did not) is that employees can access the site through the Internet, via user names and passwords. Previously, salaried employees generally used the intranet only at work because access from home required special access telephone numbers. Hourly employees worked in plants that lacked large numbers of computers for accessing the company's intranet. Hailey College of Banking and Finance General Motors 12 These employees did not bother attempting to log in from home, even though they could. The GM Pre-Portal Site For every portal, there once was a simple intranet site. The Employee Service Center began as a skunk works project in 1997 involving some IT staff that had trouble even getting people in HR to attend their meetings. IT created a site with static documents, such as employee handbooks, various HR-related enrollment forms, benefits transaction forms, flexible benefit enrollment forms and requests for direct deposits. During this process, GM decided to put General Motors University classes online, which turned out to be a major undertaking that required IT to program a middleware package just to transfer the data from the university's system to GM's intranet site. IT convinced management to reduce the amount of paperwork involved in registering for a class by putting the process online. Early on in the intranet's development, GM's IT department enlisted the communications staff to assist in the content architecture; the interface and user experience, especially the look and feel. After a little more than a year in operation, GM saw as many as 15 million to 20 million hits a month on its pre-portal intranet site, with many users heading directly to the Employee Service Center part of the site for HRrelated information and to use the handful of interactive tools available. The popularity led the company to move the center from IT to HR to sponsor further development. Fortunately, GM's service center had the makings of a mini-Internet on the company's intranet, and the employees noticed that the Company started displaying content and capability the same way the market was displaying content. This provided a lot of excitement. With HR and management enthusiasm running high, the GM IT team moved forward to add more functions, among them job postings. They never stopped to make a business case for adding a function, knowing the bureaucracy would ensnare them in a web of strategy sessions and endless approval processes. GM's executive staff gave the IT Head and his team partial carte blanche to get the job done. The strategy worked. The success of the web site and the service center proved so great, HR showed a tremendous appetite for moving even more HR content onto the pre-portal site. Much, but not all, of that content was static rather than transactional, yet employees used those parts of the service center site as much as any of the interactive areas. The Future HR Portal At GM Although GM plans to study how employees use the initial phase of the portal before launching new services, the Company has a few ideas in mind Hailey College of Banking and Finance General Motors 13 concerning future developments. For example, GM plans to make the MySocrates portal template available to international divisions and expects them to work toward their own versions soon. In addition, more roles will be added to the North American portal, among them personalized information directed at managers, for example, or for retirees. As it stands, managers see the same portal information today as do other salaried employees. In the future, they will see content directed at them that will not necessarily be available to other salaried employees. The Company also has plans to match the roles with individual corporate messages focused on each target group. MySocrates is never going to be a done deal. The GM IT team plans a new release every six months, with more functions, features, and services being added all the time. The portal's interface may not change every six months, but the continued personalization of information will make the project forever changing and growing. Moving custom information up the ladder also will become a focus in the project. The Company foresees a day when leader or manager self-service allows supervisors to see, in one place, everything they need to know about employees, from performance reviews to compensation and benefit packages, and from the courses they have taken to their history with the company. Of course, employee self-service through the web brings a time of transformation for HR -- which arguably will spend less time filing and maintaining employee records and more time in business units solving problems. The portal is transforming the function of HR within the organization and it will free HR up from mundane activities and allow them to participate in more value-added strategies, activities, and services. So while GM's e-HR strategy is on a high level, there is no reason why smaller companies can't enter the game and begin providing their employees with customized information. Hailey College of Banking and Finance General Motors 14 GM's Environmental Performance Hailey College of Banking and Finance General Motors 15 Protecting the Planet GM's Environmental Principles provide a comprehensive commitment to protect human health, natural resources and the global environment. These initiatives including a global commitment to reducing energy and water use establish GM as a leader in corporate environmental responsibility. PRINCIPLES AND POLICY GM Environmental Principles GM's Environmental Principles, adopted in 1991, apply to its facilities, products, and employees worldwide, and provide guidance in the conduct of daily business practices. Each GM facility has local environmental guidelines that build on and implement the company's Environmental Principles .As a responsible corporate citizen, General Motors is dedicated to protecting human health, natural resources, and the global environment. This dedication reaches further than compliance with the law to encompass the integration of sound environmental practices into its business decisions .The following environmental principles provides guidance to General Motors personnel worldwide in the conduct of their daily business practices. 1. We are committed to actions to restore and preserve the environment. 2. We are committed to reducing waste and pollutants, conserving resources, and recycling materials at every stage of the product life cycle. 3. We will continue to participate actively in educating the public regarding environmental conservation. 4. We will continue to pursue vigorously the development and implementation of technologies for minimizing pollutant emissions. 5. We will continue to work with all governmental entities for the development of technically sound and financially responsible environmental laws and regulations. 6. We will continually assess the impact of our plants and products on the environment and the communities in which we live and operate with a goal of continuous improvement. Environmental Performance Criteria (EPC) The General Motors Environmental Performance Criteria (GM EPC) support the consistent implementation of GM's Environmental Principles across the globe. They address common environmental issues that affect GM's facilities worldwide and help to develop common global strategies. The GM EPC supplements applicable legal requirements by setting baseline environmental management and performance at GM facilities. GM's Environmental Performance Criteria ensure that a base level of environmental performance is achieved regardless of where GM operations are located. An example of the GM EPC in action is the disposal of industrial and chemical waste, which requires careful handling. This type of waste should be disposed of in appropriately constructed landfill sites that contain specific environmental protection features. Not all countries where GM Hailey College of Banking and Finance General Motors 16 operates require that this type of waste be disposed of in hazardous waste landfills; however, the GM EPC requires that all industrial and chemical waste from its sites is disposed of in suitably regulated hazardous waste landfills regardless of its regulatory classification. Another example is that the GM EPC requires the evaluation of the environmental condition of any site prior to the sale, acquisition, or lease of the site. All sites undergo a Phase I Environmental Assessment and, if required, a Phase II Assessment and Environmental Compliance Audit. This allows GM to assess any environmental remediation that may be required and determine possible environmental liabilities and associated costs. Ceres Principles The Ceres Principles are a ten-point code of environmental conduct promoting continuous environmental improvement. GM was the first Fortune 50 manufacturing company to endorse the Ceres Principles in 1994. GM's Environmental Principles were endorsed by Ceres. GM engages with Ceres and their members in dialogues of mutual interest and concern. GM appreciates their input, including their annual review of this Corporate Responsibility Report. Ceres is a leading coalition of environmental investor and advocacy groups working together towards a sustainable future. More information on Ceres and the Ceres Principles is available at www.Ceres.org. Environmental Policy The GM Environmental Principles form the bedrock for all individual facility environmental policies around the world. The environmental policy acts as the driving force for implementing and improving a facility's environmental management system. Each GM plant has a set of environmental guidelines that: • are appropriate to the nature, scale, and environmental impacts of the organization's activities, products, or service • include a commitment to continual improvement and prevention of pollution • include a commitment to comply with relevant environmental legislation and regulations and with other environmental requirements • provide the framework for setting and reviewing environmental objectives and targets • are documented, implemented, maintained, and communicated to all employees • are available to the public. Measuring Our Global Performance It is GM's policy to assess and report its global environmental performance where possible. GM's Global Environmental Metrics Team (made up of employees from operating units worldwide, and GM's Global Environmental Issues Team) agreed on a common set of metrics for all of the company's facilities. The metrics, which were established in 1999, include parameters Hailey College of Banking and Finance General Motors 17 for energy use, water use, waste, and certain air and water emissions. GM publishes its global performance data against four of the metrics. These are: • Energy use • Water use • Greenhouse gas (GHG) emissions • Recycled and non-recycled waste. This global reporting process involves over 100 facilities in many countries with different cultural and regulatory environments, where regional differences in definitions, terminology, and calculation methods pose challenges. GM strives to ensure the accuracy and comparability of the reported data and will continue to refine the data management processes to provide further quality assurance. Environmental management Systems All GM manufacturing facilities around the world have implemented the GM Environmental Management System (EMS) which combines elements of the environmental management standard ISO14001 and elements that are specific to GM operations. This overarching management system is designed to drive a continuous performance improvement cycle in line with legal requirements, site-specific objectives and targets, and corporate and sector policies and strategies. Once implemented, a facility's EMS is certified by a third-party accredited registrar in conformance with ISO14001 or the EU EcoManagement and Audit Scheme (EMAS). All new GM manufacturing operations are required to implement and certify their EMS 24 months after the start of production or the date of acquisition by GM. By maintaining environmental management systems, GM can measure its environmental performance, and share knowledge, processes, and technologies within GM to plan and target improvements across its manufacturing facilities. As a result of this commitment to environmental management practices, GM has improved its environmental performance and reduced emissions and costs. Specific management Programs In addition to broad environmental management systems, GM also uses specific management programs for certain issues, including Resource Management and Chemicals Management. Generally, these programs have been developed and widely applied in GM's North American region, but are also used in other regions where appropriate. Chemicals Management Chemicals Management (CM) uses a single supplier to provide non-productrelated chemicals at each GM facility and provide incentives to the supplier to reduce total chemicals usage. GM has expanded the program to include all indirect chemicals used in the manufacturing process (those not directly involved in producing a vehicle). The indirect chemicals budget can vary from several hundred thousand dollars to several million dollars at a single plant. Hailey College of Banking and Finance General Motors 18 Resource Management This program views waste as a resource and aims to eliminate, reduce, and/or recycle waste as much as possible and dispose of remaining waste efficiently and safely. Under the program, a single contractor manages everything associated with waste generated at a facility Employee Training GM strives to have the best-trained environmental employees in the world. Although most environmental training is facility, country, or region specific, GM periodically facilitates global environmental conferences to provide strategic training and guidance to GM environmental professionals to help them keep pace with evolving environmental issues and best practices. GM is developing a Global Environmental Certification and Training Program which will focus on the GM Environmental Principles, GM Environmental Performance Criteria, and GM Best Practices. The training is scheduled to be rolled out in 2007 to all environmental personnel. Employee Communications GM uses numerous methods to communicate with employees. An Internal Communications Strategy Team manages the direction and flow of environmental information and continually evaluates the effectiveness of communications, which include plant and facility newsletters, satellite broadcasts, regional networking meetings, and management meetings. A comprehensive Worldwide Facilities Group internal web site keeps employees informed about the group's goals and performance. The Environmental Services section offers details about the organization, personnel, performance, objectives and lessons learned. Strategic business initiative updates are also available. Sites that have an environmental management system also have their site environmental manual available through their internal intranet sites. Legal Compliance In the U.S., statutory, regulatory, and permit programs administered by various government agencies impose numerous environmental requirements on GM facilities and vehicles. For example, a typical automobile/light-duty truck assembly plant in Michigan, USA, is subject to approximately 1,200 such legal requirements. Given these extensive requirements, compliance issues occasionally arise through allegations by government agencies or by private parties, as well as through matters identified by GM's own audit programs. Each instance of alleged non-compliance is treated seriously. These actions are often settled, even though GM may not agree that a violation has occurred. In these situations, GM does not admit liability, but settles the matter if it is determined that settlement is preferable to litigation. Hailey College of Banking and Finance General Motors 19 Accidental Releases GM tracks chemical spills and non-routine air emissions from our facilities in the U.S. and Canada. U.S and Canadian requirements are different for spill/release reporting. In order to present information in a comparable fashion, the information presented here represents spills/releases that are above thresholds required in the U.S. Environmental Planning and Community Right to Know Act (EPCRA) and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Spills and non-routine air emissions above reportable quantities as defined by the EPCRA and CERCLA have remained at zero for both the U.S. and Canadian facilities from 2003 through 2005. Awards And Accomplishments Every year, various GM operations receive awards recognizing the company's commitment to environmental stewardship. Resource Management GM's Resource Management (RM) program preserves natural resources, reduces environmental impact, and achieves cost savings. In this program, a single supplier manages all wastes at the plant. The supplier is encouraged to reduce waste volumes. GM has designed the Resource Management program to prevent waste from being created. Resource managers receive financial incentives to find innovative ways to eliminate waste created during manufacturing. Rather than paying a waste contractor simply to dispose of materials, this approach makes the supplier a partner inside the plant. Wastes previously sent to landfill, such as cardboard boxes and wooden pallets, are now directly reused or recycled. Now operating, where economically feasible, in all GM North American manufacturing facilities, the RM program has saved $6 million over the past three years. GM currently is in the process of implementing the program in Europe and South America. The U.S. Environmental Protection Agency (EPA) has recognized the program through its Waste Wise program. I- Cultural Priorities At GM, you often hear the word ―performance‖ — performance cars, parts, management, and even a performance culture. A performance culture is a work environment that helps promote business results. An atmosphere that inspires employees to do their best, empowers decision-making, rewards accomplishment, embraces challenges, and embodies high expectations. It's key in creating a competitive, profitable, and satisfying workplace. No matter how much an organization redesigns, reconfigures, or reorganizes for efficiency and productivity, high-performing people ultimately drive business results. At GM, we've embraced four priorities to create our unique performance culture: • Focus on the customer – create products that exceed our customers' expectations Hailey College of Banking and Finance General Motors 20 • act as one company – leverage the strengths of our global team, drive common best practices, and accelerate knowledge transfer • Embrace stretch targets – reach for goals beyond what is thought possible • Move with a sense of urgency – drive significant speed into our business In addition, many other elements combine to create a value-based, performance culture, including a healthy, safe work environment, competitive wages and benefits, a diverse workplace, adherence to human rights and labor standards, and of course, job satisfaction. Hailey College of Banking and Finance General Motors 21 GM's SOCIAL SECTOR Hailey College of Banking and Finance General Motors 22 GM's core value of individual respect and responsibility helps ensure a sustainable commitment to diversity and sets fundamental expectations for behaviors and actions that create an environment that allows everyone to fully contribute. • GM is fundamentally changing the way its vehicles are designed, built, marketed, and sold to better address the wants, needs, shopping, and purchasing dynamics of diverse consumers. • GM believes great products and innovations are born of creative organizations that bring to bear diverse perspectives. Work Force Diversity at GM GM's Diversity Strategy is built on a broad definition of diversity — much more than race, gender, and ethnicity. Our strategy encompasses such dimensions as age, family status, religion, sexual orientation, level of education, physical abilities, union representation, years of service, language, thinking styles, and personality type. "Many People, One GM, Now‖ reflects GM's global diversity commitment. We believe that our differences contribute to our ability to achieve common goals and objectives for total customer enthusiasm. Vision GM's diversity vision is to create an environment that naturally enables employees, suppliers, dealers, and communities worldwide to contribute fully to the pursuit of total customer enthusiasm. GM's Diversity Initiatives has oversight for GM's long-term, comprehensive diversity strategy based on three guiding principles: • The integration and alignment of diversity into all aspects of GM's operations • The creation of a "one company" experience and a strong culture of fairness and respect for all who interface with GM | Diversity • An approach to diversity that keeps "big and fast" in mind Specific leadership behaviors help drive integration of diversity principles into the business. These behaviors include: • Communicating expectations • Seeking diverse input • Creating diversity awareness • Managing for results In addition, supporting GM's Diversity strategy includes an extensive group of leaders and volunteers who are involved in the Diversity Network, such as: 1) Strategic champions - responsible for integration and alignment across all major interfaces (Consumers, Dealers, Employees, Communities, and Suppliers) . 2) Diversity partners - Volunteers across GM who act as change agents and points of contact for information and resources. Hailey College of Banking and Finance General Motors 23 3) Affinity Groups and affinity Group Council – with over 3,000 members, GM's Affinity Groups represent ten broad constituencies responsible for the recruitment, retention, and development of their constituents. They also support marketing and product development. Each Affinity Group has a senior leadership liaison acting as champion and mentor for its membership. 4) Leadership Liaisons – senior level executives assigned to Affinity Groups who provide advice and ideas about effective leadership within the context of GM culture, challenge the group to be successful, hold the groups accountable to add value and contribute to GM, probe for ways to show support, act as an advocate at leadership and management meetings, share learnings about constituencies with other executives, and finally learn about the constituency's issues and concerns understand and monitor group issues on an ongoing basis. 5) Diversity affiliates – a broad network of individuals who have indicated interest in receiving diversity materials. 6) employee nexus group – This cross-functional group of individuals met for a two day discussion about the diversity of functions within GM resulting in a powerful video series titled, ―Behavior x Results = Success. Policy Development GM has a number of policies for guidance in this area: • GM Policy Statement Regarding Diversity, Equal Opportunity, Affirmative Action, NonDiscrimination, And Sexual Harassment • GM Policy Regarding Employment Of Individuals With Disabilities • GM Anti-Harassment policy • GM Equal Employment Opportunity Policy • GM Policy Regarding Employment of Special Disabled Veterans, Veterans of the Vietnam Era, Other Covered Veterans, Newly Separated Veterans and Recently Separated Veterans. Consumer Diversity Numbers are enhanced with global population trends, particularly in the developing world. Globally diverse markets are GM's future. GM's diversity markets growth strategy includes: • Leveraging GM's ten Affinity Groups to understand better diverse market needs, get the facts on spending power and buying trends, and to develop marketing campaigns • Leveraging community events to build relationships and brand knowledge Hailey College of Banking and Finance General Motors 24 • Sponsoring public policy organizations such as the U.S. Hispanic Chamber of Commerce • Working with GM dealers so they understand the changing marketplace and the business opportunity and nuances of customer service for particular minority groups • Designing advertising and consumer literature aimed at minority groups. For example, in the U.S., GM has created and placed advertisements specifically for AfricanAmerican and Hispanic publications, has created Spanish-language advertisements, and produces brochures for women car buyers. Consumer diversity is not only about ethnicity. Dealer Diversity GM was the first U.S. automaker to institute a structured minority dealer initiative. For more than 30 years, GM has been committed to growing a diverse and financially successful dealer network. Since 1972, GM has offered an industry-leading training program to minorities to help prepare hem to become future dealers.Today, more than 80 percent of GM's approximately 340 minority dealers own their dealerships outright. The selection process for identifying new dealerships has been standardized and aligned with GM field operations, nationwide. Today, GM has 265 womenowned dealerships. Employee and talent acquisition and Development GM's recruiting process strives to make globally diverse candidates aware of GM, attract them to the company, consider GM an employer of choice, commit to GM's vision, join the team, and be placed where they can fully contribute to total customer enthusiasm. In the U.S., GM's recruiting efforts include campus recruiting and using experienced professionals. GM recruits 80 percent of all new college graduates, interns, and co-ops from Key Institutions and Key Recruiting Organizations (KRO). The remaining 20 percent come from local or niche schools. Supplier Diversity In 2005, General Motors continued to lead the automotive industry in suppler diversity, spending $5.6 billion with U.S.-based minority suppliers, and raised the total to nearly $57 billion since the industry's first program was established in 1968. GM has retained its supplier diversity leadership position despite a continued reduction in U.S. vehicle sales which had, in some instances, influenced spending throughout the company. Compared to 2004, GM's minority spending dropped from $6.6 billion in 2004 to $5.6 billion in 2005. GM's Tier 1 spending with minority suppliers dropped from $4.2 billion in 2004 to $3.6 billion in 2005. Tier 2 minority spending dropped from $2.4 billion in 2004 to $2 billion in 2005. Minority suppliers provide content and support services for a variety of important GM products, ranging from the new full-size trucks to the upcoming launch of three cross-over vehicles. GM tracks spending by ethnic minority, as certified by the National Hailey College of Banking and Finance General Motors 25 Minority Supplier Development Council. For 20 consecutive years, GM Tier 1 minority spending has been $1 billion or more. In April 2005, GM awarded five minority suppliers with its Supplier of the Year award: Black River Plastics; Bridgewater Interiors LLC; MPS Group, Inc.; NYX, Inc.; and The Ideal Group, Inc. Communities Employees give back to various GM communities through their gifts of time and talent, participating with organizations and community groups that have value for them. GM supports this form of community investment, through volunteerism, and respects a philosophy of ‗personal time, personal choice' regarding how people choose to get involved in community needs and issues. Locally driven, the end result had many facets, including: • • • • • • the reforestation of an urban area blighted by a vast outbreak of dying Ash trees. GM employee mentors introducing young, underserved children to career paths at General Motors management of a community fair designed to enhance the quality of life for urban families, groups, and individuals in the areas of health, finance, and fitness improvements to the main office of a Hispanic community outreach organization, and painting the community elementary school help for senior citizens by building wheelchair ramps, painting, and providing general support the clean up of sites on a local river Diversity awards Through community partnerships, new models of volunteerism and a commitment to diversity, GM is raising the bar on volunteerism while touching lives and making a difference. A few examples of external recognition for our performance are: • • • Texas Association of Mexican American Chambers of Commerce (TAMACC) Corporate Hispanic Advocate of the Year Award in El Paso, Texas (August, 2006) Women in Communications Matrix Award– Vanguard Award for innovative use of various communications mediums to market to women – Cynthia Price (May 2006) Chinese Institute of Engineering Asian-American Engineer of the Year Award – Yucong Wang (February 2006) Hailey College of Banking and Finance General Motors 26 Health, Safety & Security One major challenge for General Motors and the automobile industry in general is finding new ways to help skilled workers and contractors identify hazards in the workplace and ensure that proper procedures are used when performing tasks. Another has been developing leading indicators to complement existing injury and illness record-keeping. As incident rates continue to decline, tracking ongoing improvement will require other leading indicators (e.g. process-related performance). To meet these challenges, GM has a number of initiatives in place: • • • • • • • • • • Sharing Safety Practices Skilled Trades Safety Industrial Truck / Material Handling Risk assessment Management system GM Safe Driving Office safety Memberships Security UAW-GM Health and Safety Activity 1) Sharing Safety Practices A key strategy in reducing risk is the identification and sharing of safety practices. GM's experience has shown that a safety practice can come from anywhere in the world. Through email, teleconferences, or GM's Health and Safety web site, information is shared and passed to all corners of the globe. 2) Skilled trades Safety Course - Tools for Skilled Trade Supervisors The purpose of this tool is to provide supervisors with the skills they need to effectively supervise skilled trades' employees from a safety perspective. Examination of past injuries/fatalities has found that a need exists to ensure that skilled trades' supervisors are keenly aware of hazard identification and hazard control when performing their duties. ―Assigning Risk‖ refers to the introduction of a different approach to how skilled trades' supervisors assign work. In summary, with the greater risk of serious injury Hailey College of Banking and Finance General Motors 27 that our skilled trades employees face, the goal is to develop a mindset where our employees make the right decisions, every time, for their protection, and work to a plan specifically designed to mitigate risks. 3) Industrial truck / Material handling A review of statistics over the past several years identified a potentially significant source of injuries and near misses in GM North America. Some of the key initiatives involved in this program are as follows: • • • • • • • • • Improved data collection Formation of pedestrian industrial vehicle committees at each location Regular safety messages Sharing of best practices and in-house developed videos Posters Color selection for new material dollies New seat belt policy Plant layout guidelines Orange crush zones (high risk/high caution areas) The list above reflects some of the efforts currently being implemented across GM North America and shared with our other global regions as well. 4) Risk assessment Joint programs with trade unions and specialized employee training initiatives have helped GM become the leader in health and safety performance in the automotive industry. GM has developed a practical risk assessment and design methodology that is used during the design of machine safety features. 5) Management System GM has integrated the core elements of safety processes into GMS, the GM Global Manufacturing System. Leading indicator metrics have now been integrated into GMS to provide global operations managers with a process specifically designed to mitigate risks. 6) GM Safe Driving GM's Safe Driving Program is an ongoing program of traffic safety awareness and driver training focusing, not only on our employees, but also the general population. Hailey College of Banking and Finance General Motors 28 7) Office Safety General Motors continues its efforts to develop a 24/7 safety culture among all employees. The GM Office Health and Safety process assesses the physical safety of our facilities, and requires the implementation of risk reduction processes such as building emergency plans, indoor air quality management, and related healthy work environment initiatives. 8) Memberships GM belongs to numerous health and safety industry and business associations. Experience has shown that such partnerships have benefits, where GM learns from benchmarking against other organizations while, in turn, sharing its own practices. 9) Security GM's standards address four elements of security: • • Processes and administration for GM security operations - these standards specify requirements for GM Security Operations and suppliers, including process scope and performance reporting requirements for GM locations. Fire and emergency prevention and protection standards seek to assure the protection of employees, property, and continuity of business operations. Local business unit management, along with security personnel, must develop specific procedures for each facility. • • Investigation of wrongdoing or negative incidents – these standards address how security investigations within General Motors are to be conducted. Security standards are established to assure the protection of employees and property. 9) UAW-GM health and Safety activity The UAW-GM Health and Safety Activity, part of the UAW-GM Center for Human Resources (see Training), develops programs and provides training which are implemented within UAW-represented GM facilities. Workers receive appropriate health and safety training based on their job assignments. Human Rights General Motors believes that support for human rights begins by treating each other with respect and dignity. GM employees are responsible for respecting each other in their business relationships and in the communities Hailey College of Banking and Finance General Motors 29 where GM operates. GM's fairness and respect policies demonstrate support for employees' rights. GM recognizes that the responsibility for managing the impact on society also extends to GM's suppliers Principles GM honors all local laws, respects local customs, and adheres to the Global Sullivan Principles (GSP) throughout its global operations. GM also encourages its suppliers to adopt the Global Sullivan Principles or another equivalent set of principles that support human rights. According to the Global Sullivan Principles, General Motors will: • Express our support for universal human rights and, particularly, those of GM employees, the communities within which GM operates, and parties with whom GM does business, as detailed in the rest of this section. • Promote equal opportunity for employees at all levels of the company with respect to issues such as color, race, gender, age, ethnicity, or religious beliefs, and operate without unacceptable worker treatment such as the exploitation of children, physical punishment, female abuse, involuntary servitude, or other forms of abuse. See the diversity section in Social Performance. • • Respect employees' voluntary freedom of association. Compensate employees to enable them to meet their basic needs and provide the opportunity to improve their skill and capability in order to raise their social and economic opportunities. See wages and benefits section in our Economic chapter. • • Provide a safe and healthy workplace; protect human health and the environment; and promote sustainable development. Promote fair competition including respect for intellectual and other property rights, and not offer, pay, or accept bribes. See Winning with Integrity guidelines. Policies GM has a number of policies in place that apply to employees and suppliers (detailed below). Since GM purchases $150 billion worth of goods and services from more than 25,000 global suppliers, it also has a specific Global Purchasing Supply Chain (GPSC) Policy to help manage this complex area of our business. Child Labor General Motors respects all local laws regarding compulsory attendance and does not hire children under the legal age for employment in any location. school Hailey College of Banking and Finance General Motors 30 GM's GPSC Policy prohibits its suppliers and their subcontractors from using child labor in the supply of goods or services. GM continues to monitor performance in this area. Forced Labor The decision to seek employment is voluntary, and GM does not condone involuntary servitude in any form. GM's GPSC Policy prohibits the purchase of goods produced with the use of forced or slave labor. Freedom Of Association General Motors respects the right of all employees to choose union membership. The Global Sullivan Principles specifically calls for respect for the voluntary freedom of association. GM complies with all laws covering the right of employees to organize for purposes of collective bargaining and encourages employees to support or oppose union membership without fear of coercion or retaliation from General Motors, any individual, or external organization. Global Purchasing and Supply Chain Policy GM's GPSC Policy requires that any goods or services supplied must comply with all applicable regulations or standards of the countries of destination. These relate to the manufacture, labeling, transportation, importation, exportation, licensing, approval, or certification of goods or services. Compliance With Principles GM's Corporate Responsibility Group has created a self-assessment survey (aligned with our Process Risk Management system) that will be used internally to evaluate compliance with the Global Sullivan Principles. GM Aware Line The GM Aware line receives a high-level of attention within GM Management. Complaint statistics and trends are reviewed quarterly with the Individual Respect and Responsibility (IRR) team and annually with the IRR Governance Board and the GM Board of Directors. Grievances and Complaints Grievances or complaints by represented employees (generally hourly but may also include non managerial salaried in some countries) are handled according to the procedures specified in the Hailey College of Banking and Finance General Motors 31 applicable national and/or local collective bargaining agreements. Procedures for non-represented (typically salaried) employees generally differ from those established for represented employees. For U.S. salaried employees, GM manages complaints according to the Open Door Policy, detailed in the U.S. HR Policies & Procedure web site. This helps ensure open communication with management when employees have a question, concern, or complaint about any aspect of their employment. In 2005, there were a total of 227 Open Door cases. In all of the cases, management's initial position was upheld. The table below provides a breakdown of the 227 cases by issue: 2005 open Door Cases By issue GM offers centralized learning through GM University (GMU), a corporate university established in 1997, and the Technical Education Program. GMU seeks to improve business performance by: • • • • • Building professional skills and capabilities linked to performance and results Fostering faster learning that can be leveraged globally Developing leadership/executive programs that build capability tied to business results Enabling corporate-wide change initiatives to improve business results Helping develop a performance driven culture. GMU offers more than 2,000 courses to its more than 80,000 executive, management, technical, and professional employees around the world. GM also offers a Technical Education Program in partnership with universities, where employees can take courses and earn degrees in automotive subjects. Having committed to training its workforce to the highest standards, GM needed to find the best way to provide this training to ensure it was both meaningful and efficient. GM now offers its employees: • • Traditional classroom training, web-based learning, Interactive Distance Learning, and self directed study through GM University. The ability to further technical knowledge and skills while earning a degree through the award winning Technical Education Program. Technical Education Program Since 1984, the Technical Education Program (TEP) has partnered with leading universities To provide job-related education to GM professionals. University seminars, courses, and Degree programs are offered in leading automotive topics. Available degrees range from associate to doctoral, as well as certificate options all targeted to GM's core competencies, competitiveness, and advanced technical work. Delivered through the flexibility of distance learning technologies, the program makes high quality, flexible education from Hailey College of Banking and Finance General Motors top-ranking universities easily accessible to GM employees. 32 Distance Learning Distance Learning (DL) uses state-of-the-art equipment to train GM salary and dealership employees in North America, Canada, and Mexico. DL uses a combination of live one-way video, two-way audio (for communication between the instructor and students), and an interactive keypad for quiz sessions. On average, 400 live video broadcasts covering a wide variety of subjects on a variety of functional topics are delivered monthly via satellite to GM salaried employees in over 200 GM facilities and more than 6,500 GM dealerships in North America, Canada, and Mexico. E-Learning E-Learning uses GM's Intranet to improve the global access and availability of GMU courses — 24 hours a day, seven days a week. GMU gradually has been growing the percentage of E - learning courses over the last few years. Currently, approximately 34 percent of all employee learning is completed via the web. The UAW-GM CHR staff jointly develops, supports, and delivers a wide range of programs and activities in four general areas: • Health and Safety • Skill Development and Training • Work and Family • Product Quality Involvement and Promotion Hailey College of Banking and Finance General Motors 33 GM's Corporate Governance Hailey College of Banking and Finance General Motors 34 Leadership The General Motors Board of Directors represents the owners' interest in perpetuating a successful business, including optimizing long-term financial returns. The Board is responsible for determining that the Corporation is managed in such a way to ensure this result. This is an active, not a passive, responsibility. The Board has the responsibility to ensure that in good times, as well as difficult ones, management is capably executing its responsibilities. The Board's responsibility is to regularly monitor the effectiveness of management policies and decisions, including the execution of its strategies. In addition to fulfilling its obligations for stockholder value, the Board also has responsibility to GM's customers, employees, suppliers, and to the communities where it operates — all of whom are essential to a successful business. All of these responsibilities, however, are founded upon the successful perpetuation of the business. The Board operates under General Corporation Law of the State of Delaware (where GM is incorporated), GM's certificate of incorporation and bylaws, and our Corporate Governance Guidelines, which were adopted by the Board in 1994 and updated most recently in 2006. All committees are composed of independent directors. GM uses the same definition or standard of ―independence‖ as the U.S. Securities and Exchange General Motors 2005/06 Corporate Responsibility Report 3-4 Commission (SEC) and the New York Stock Exchange (NYSE). Each independent director is obliged to notify GM of any event that may affect his or her independence. Automotive Leadership Group The Automotive Strategy Board (ASB) is responsible for the global strategic direction of GM's automotive business, including alliances and corporate and resource issues. The Automotive Product Board (APB), formed in March 2005, focuses on the company's global product portfolio, product programs, global capacity planning, global capital and engineering budget, and advanced propulsion and technology strategies. The ASB and the APB — together, the GMA automotive Leadership Group — work together to manage GM's four business regions: • North America (GMNA) • Europe (GME) • Latin America, Africa and Middle East (GMLAAM) • Asia Pacific (GMAP) Process GM is committed to high standards of corporate governance, accountability and responsibility, business integrity, and community leadership. Guidelines On Significant Corporate Governance Issues In 1994, GM's Board pioneered adopting guidelines for corporate governance, which set out the principles by which GM is governed. The Directors and Corporate Governance Committee of the Board annually monitor compliance with these guidelines; and the Board has periodically reviewed and revised them to provide greater clarity, strengthen them, and to respond to changes in the corporate landscape particularly the reforms resulting from the Sarbanes Oxley Act of 2002.The Corporate Governance Guidelines cover a variety of topics, including Hailey College of Banking and Finance General Motors 35 selection and training of the Board, Board leadership, Board composition and performance, Board relationship to senior management, Board committee matters, and leadership development .Among the notable provisions of the Corporate Governance Guidelines are: • Independent directors must comprise a substantial majority of the Board. • All key committees are comprised solely of independent directors. • Decisions regarding corporate governance are made by the independent directors. • Directors must offer their resignation from the Board upon change in their principal occupation. • Directors are encouraged to serve on no more than four boards. • At least 70 percent of director compensation is paid in GM stock, which must be held untilretirement from the Board. • The Board and committees of the Board retain independent outside financial, legal, and otheradvisors as appropriate. • The Board annually evaluates its own performance, as well as the performance of the Chairman and CEO. About us | Corporate Governance Code of Ethics and Conflicts of interest GM's directors, officers, and employees are subject to the same code of ethics, Winning with Integrity. GM requires all global executives and salaried employees to affirm annually that they are aware of the requirements of Winning with Integrity and are complying with those requirements. • GM hires, promotes, trains and pays based on merit, experience, or other workrelated criteria, and strives to create work environments that accept and tolerate differences while promoting productivity and teamwork. • GM endeavors to protect the health and safety of each employee by creating and maintaining a healthy, injury-free work environment. • All GM employees have an obligation to protect GM's assets, including information, and to ensure their proper use. • Providing false or misleading information in any GM business record is strictly prohibited. • As a general rule, GM employees should accept no gift, entertainment, or other gratuity from any supplier to GM or bidder for GM's business. • GM employees must immediately disclose any situation that could result in an actual or potential conflict of interest involving the employee or any member of his household, such as investing in a supplier, dealer, customer, or competitor. • GM and all its employees must comply with all laws, including the U.S. Foreign Corrupt Practices Act, competition laws, and export control laws. • To protect GM's reputation for integrity, it must communicate clearly and accurately to the public. Reporting Employee Concerns In keeping with its core values, GM employees have an obligation to notify the appropriate individuals of any unethical or illegal conduct they observe. GM maintains a toll-free telephone reporting system — GM Awareline — available on a global basis 24 hours a day, seven days a week. GM Awareline permits employees to anonymously report concerns of possible Hailey College of Banking and Finance General Motors 36 criminal wrongdoing, actions believed to be contrary to GM policy, and possible emergency life-threatening situations. A team drawn from GM's Legal Staff, Audit Services, and Global Security is responsible for monitoring, investigating, and acting on all concerns reported on Awareline. Managing Public Policy Issues Management Structure The principle purpose of the Public Policy Committee of the GM Board of Directors is to foster GM's commitment to operate our business worldwidein a manner consistent with the rapidly changing demands of society. The Committee shall discuss, and bring to the attention of the Board as appropriate, current and emerging political, social, and public policy issues that may affect the business operations, performance, or public image of the company. Matters reviewed by the Committee include, but are not limited to: research and development, automotive safety, environmental matters, government relations, diversity, corporate social responsibility, education, communications, employee health and safety, trade, and philanthropic activities. GM's Public Policy Center (PPC) identifies, co-ordinates, and manages key issues that affect our business in the areas of corporate responsibility and sustainability, government relations, energy and environment, economics, diversity, philanthropy, and community relations. The objective of the PPC is to advance GM's General Motors 2005/06 Corporate Responsibility Report 3-6 position on issues of public policy. To help achieve this vision, the mission of the PPC is to: • Anticipate external trends and changes that couldaffect GM's business decisions • Support corporate business and cultural objectives • Develop and execute coordinated public policy strategies • Ensure that GM's strategic plans and operating practices take into account the changing public policy environment. A Public Policy Global Coordination Team directs the PPC and comprises members from GM's four operating business regions and the respective regional strategy boards. This management structure provides the Global Coordination Team with a direct link to the strategy and business decisions taken by the Automotive Strategy Board and the regional strategy boards. PPC leadership is provided by its Vice President of Environment and Energy, Vice President of Corporate Responsibility and Diversity, Vice President of Government Relations, and Chief Economist. These individuals make up the leadership of the Public Policy Global Coordination Team. The activities of the PPC are reported annually using this Corporate Responsibility Report and through the GMability web site (launched in 2001). The management approaches adopted for specific environmental, social, and community issues are discussed in the respective sections of this report. L- Key Issues : The auto industry is challenged with meeting numerous government regulations and addressing societal concerns by both improving current technology and creating new solutions. These new solutions must be developed at a cost that meets consumer, shareholder, and societal needs. Hailey College of Banking and Finance General Motors 37 We recognize the potential global growth opportunity in our business and understand that economic growth must be balanced with environmental performance and societal well being. Providing more of the world's population with access to mobility options will serve to improve lives, but with this growth come challenges. These challenges were identified in the World Business Council for Sustainable Development's (WBCSD) Sustainable Mobility project's final report, Mobility 2030. These challenges cannot be adequately addressed by one party. Strategic partnerships among business, govern we face collectively nnment, and nongovernmental sectors are essential to address challenges. GM is moving forward with our stakeholders to develop solutions that work for our business, our Shareholders, our stakeholders, our employees, and the communities where we operate.The key product and facility related corporate responsibility issues: sustainable mobility, conventional air emissions, greenhouse gas emissions, and road safety are discussed in the web-based report. Global Climate GM is concerned about the potential impact of its business, including its processes and its products, on society and the environment. We are also concerned about the concentration of greenhouse gases in the atmosphere and we believe there is a constructive way for all stakeholders to move forward together on this issue. The basic challenge is to meet the world's growing demands for affordable transparency necessary to sustain economic growth, while also addressing long-term concerns about the environment. GM believes the most effective way to improve energy efficiency and reduce greenhouse gas emissions is the voluntary development and global implementation of cost-effective energy technologies in all sectors. GM is both reducing and reporting its greenhouse gas footprint through its globally integrated energy and carbon management strategy — a strategy that is measurable and verifiable. GM's implementation plan to address this challenge reflects numerous voluntary greenhouse gasmanagement initiatives across the globe: General Motors 2005/06 Corporate Responsibility Report 3-7 • Products: GM is implementing advanced technologies in its internal combustion engines (such as Active Fuel Management, flex fuel systems capable of running on renewable E85 ethanol made from corn, and clean diesels), in its hybrid vehicles (which include GM's hybrid bus transmission systems, the Saturn Vue Green Line Hybrid and full-size hybrid pickups that are all available today, and full-size SUV and car hybrid systems that will be rolled out over the next few years), and in its hydrogen-powered fuel cell vehicles that emit only water (moving us toward the ultimate goal of removing the automobile from the environmental equation). • Processes: GM continues to set targets and monitor greenhouse gas emissions from its facilities and is taking steps to achieve nearterm reductions. In 2005, GM's global facilities achieved a 15.5 % reduction in CO2 emissions compared to 2000. • Strategic Planning: We are guided by GM's Environmental Principles. GM believes the pursuit of a diversified energy portfolio ultimately provides the best opportunity not only to reduce greenhouse gas emissions from the automotive sector, but also to increase the oilconsuming nations' ability to withstand oil-supply disruptions. GM also supports scientific research to improve the understanding of the possible long-term effects of human activities on the climate system. Policy initiatives that encourage advanced Hailey College of Banking and Finance General Motors 38 technology development are best addressed through voluntary initiatives and market-oriented measures, not government mandates. For example, the Asia Pacific Partnership for Clean Development and Climate is taking a voluntary, technology-driven approach. Given that climate change is a global issue both in terms of cause and implication, it is essential that all parties be appropriately engaged. This will require cooperation between countries, manufacturers and energy providers in research, development and commercialization. In addition, consumers must embrace these new technologies at a level sufficient to make a difference. Road safety At the conclusion of the World Business Council for Sustainable Development (WBCSD) Sustainable Mobility project, GM evaluated where it could effectively work with members of the mobility group to address the challenges identified in the report. The WBCSD Sustainable Mobility report identified road safety as one of the seven goals that will improve the outlook for sustainable mobility: "Significantly reduce the total number of road vehicle-related deaths and serious injuries from current levels in both the developed and developing worlds."Road safety was the obvious choice because of the potential to reduce road vehicle-related deaths and injuries. GM developed a plan of engagement with General Motors 2005/06 Corporate Responsibility Report 3-8 The WBCSD Mobility project members and proposed that the group join forces with the Global Road Safety Partnership (GRSP), the leading NGO working in this area. The Global Road Safety Initiative (GRSI) was formed to further support the mission of the GRSP. The GRSI is funded by seven of the world's largest automotive and oil companies, which have committed $10 million to road safety. Ford, Honda, Michelin, Renault, Shell, and Toyota have joined GM in a five-year project commitment. GRSI will focus on the critical road-safety issues identified in the World Report on Road Traffic Injury Prevention (2004, World Health Organization [WHO] and the World Bank). These include pedestrian safety, drinking and driving, helmet use, speed management, and seat belt use. GRSI will build upon the good practice guides being developed by GRSP, WHO, World Bank, and the FIAFoundation. It will provide training to road-safety professionals in developing countries, and provide seed money to support pilot projects to improve road safety.GRSI will help to build the capacity of developing countries to reduce traffic fatalities and help expand GRSP's capability to deliver road-safety improvements in line with the recommendations of the World Report on Road Traffic Injury Prevention. M- Competitive Challenges to GM: Currency Manipulation GM must compete in an intensively competitive global auto market. GM has been, and will remain, a strong competitor in the marketplace; but there are Hailey College of Banking and Finance General Motors 39 two important areas where governmental policies adversely affect its competitiveness. The artificially weak yen, whose real or inflation-adjusted value is at its lowest level in over 20 years and which the Economist magazine called the ―world's most mispriced currency,‖ provides Japanese automakers a $2,000 to $8,000 per vehicle cost subsidy for the more than two million vehicles annually exported into the United States. While we are very willing to make difficult decisions to transform our business to improve its competitiveness, we are not in a position to counter the billions of dollars in annual subsidies caused by the excessively weak yen. Health Care GM has a growing retiree population and retains many active workers. GM provides health coverage to over one million employees, retirees and their families. GM's health-care bill in 2005 for every U.S. employee, dependant, retiree, and surviving spouse totaled $5.3 billion. No other company in the world has that kind of health care obligation. Today we compete mostly against foreign-owned companies whose governments cover much of their employee and retiree health care and pension costs or who have few retirees in the U.S. With support from the private sector, our government can exercise its power both as the largest purchaser of health care and as a policymaker to stabilize costs, reduce errors, and provide consumers the cost and performance information they need to make informed health-care decisions. GM works with other businesses, consumer groups, the healthcare industry, and governments at every level to improve the quality of health care and reduce costs. We support accelerating the use of information technology to eliminate errors and improve care, reforming medical liability laws to reduce costly defensive medical practices, and promoting the availability of generic drug alternatives. We also urge policymakers to provide a greater focus on improving the quality of care for those with serious illnesses or chronic diseases — the one percent of the population that makes up 30 percent of the nation's overall health care bill. Currency manipulation and health-care costs represent a significant challenge to competitiveness in our largest market. GM is a formidable competitor when allowed to compete without the policy handicaps we face in the United States. Perhaps there is no better example than China. With the Japanese market virtually closed, China was the key to the Asia Pacific region for GM. Our growth in the China market has been truly impressive. GM became the #1 automaker in China in 2006. We welcome competition in any region of the world, competition that is unfettered by currency manipulation and disproportionate health-care costs. Ongoing Partners GM has established memberships, sponsorships and partnerships with organizations that advance common goals on social issues affecting public policy. Governmental Hailey College of Banking and Finance General Motors 40 • Voluntary Initiatives on Energy and Greenhouse Gas Emissions • Freedom CAR In January 2002, USCAR and the U.S. Department of Energy teamed together to create the FreedomCAR Partnership. In September 2003, the FreedomCAR effort expanded to become the FreedomCAR and Fuel Partnership, adding five energy companies — BP America, Chevron Corporation, ConocoPhillips, Exxon Mobil Corporation and Shell Hydrogen LLC — to the USCAR/DOE partnership. It is supported by numerous suppliers, research institutions and universities. Non-Governmental • Ceres • The Nature Conservancy • Automotive Service Educational Programs (ASEP) • Automotive Youth Educational Systems (AYES) • Safe Kids Worldwide • SPACE: A Journey to Our Future • Corporate Social Responsibility Initiative: Kennedy School, Harvard University • Global Road Safety Partnership Business • World Business Council for Sustainable Development (WBCSD) • • • • U.S. Council for International Business (USCIB) The Business Roundtable (BRT) The Conference Board Additional partnerships Non-Governmental Partners CERES GM's Environmental Principles have been endorsed by Ceres. GM was the first Fortune 50 manufacturing company to endorse the Ceres Principles in 1994. The Ceres Principles are a 10-point code of environmental conduct promoting continuous environmental improvement. We engage with Ceres and their members in dialogues of mutual interest and concern. We appreciate their input, including their annual review of this Corporate Responsibility. Space: A Journey to Our Future: GM is partnering with NASA on a five-year exhibition on space exploration, one of the most comprehensive interactive presentations ever developed. Hailey College of Banking and Finance General Motors 41 The purpose is to ignite the desire for discovery, spark imaginations and inspire a new generation of innovators and explorers. In the past, GM innovation helped put a lunar rover on the moon and space related innovation remains important today in the development of future clean and safe vehicle power systems like the fuel cell, as well as automotive safety and service systems like On Star. Business Partners GM has been a member of this global organization since 1995. The WBCSD is a coalition of multinational companies that share a commitment to environmental protection, economic growth, and social equity. GM has been actively involved in several WBCSD projects, including the WBCSD Sustainable Mobility project where GM was the co-chair. Hailey College of Banking and Finance General Motors 42 GM'S PRODUCTION Hailey College of Banking and Finance General Motors 43 Hailey College of Banking and Finance General Motors 44 Explanation of Table: The production of GM has been increased since from 2001-07 nationwide as well as internationally which is due to the increase in requirement of GM cars in the market. This increase is not only in one country or in one joint venture. It has been increased all over the world and in normally all joint venture either they are with NUMMI, DAEWOO, GM EGYPT however some of these has been increased and some has been decreased but we have seen an overall increase since from 2001-07 as in 2001 the total worldwide production was 7786 which is now 9257 so there is an increase of 1471 units which not an efficient but it is satisfactory as this was the period of globalization and great competition because there were many competitors who has been arise during this time one of the is TOYOTA which has captured very much American market. If we show the production in graph than it would be as O- GM in the new century: In the late 1990s, the U.S. economy was on the rise and GM and Ford gained market share producing enormous profits primarily from the sale of light trucks and sport-utility vehicles. From 2000 to 2001, the Federal Reserve in a move to quell the stock market, made twelve successive interest rate increases. Following the September 11, 2001 attacks, a severe stock market decline caused a pension and benefit fund under funding crisis. GM began its Keep America Rolling campaign, which boosted sales, and other auto makers were forced to follow suit. The U.S. automakers saw sales increase to leverage costs as gross margins deteriorated. Although retiree health care costs remain a significant issue, General Motors' investment strategy has generated a $17.1 billion surplus in 2007 in its $101 billion U.S pension fund portfolio, a $35 billion reversal from its $17.8 billion of under funding. Hailey College of Banking and Finance General Motors 45 In 2004, GM redirected resources from the development of new sedans to an accelerated refurbishment of their light trucks and SUVs for introduction as 2007 models in early 2006. Shortly after this decision, fuel prices increased by over 50% and this in turn affected both the trade-in value of used vehicles and the perceived desirability of new offerings in these market segments. The current marketing plan to extensively tout these revised vehicles as offering the best fuel economy in their class (of vehicle). GM claims its hybrid trucks will have gas-mileage improvements of 25%. In the summer of 2005, GM announced that its corporate chrome emblem "Mark of Excellence" will begin appearing on all recently introduced and allnew 2006 model vehicles produced and sold in North America. The move is seen as an attempt by GM to link its name and vehicle brands more closely. In 2005, GM promoted sales through an employee discount to all buyers. Marketed as the lowest possible price, GM cleared an inventory buildup of 2005 models to make way for its 2006 lineup. While the promotion was a temporary shot in the arm for sales, it did not help the company's bottom line. GM has since changed its marketing strategy to a no haggle sticker policy in which all vehicle prices are lowered, but incentives are reduced, if not eliminated. GM in China General Motors is the best selling auto maker in China. The Buick brand is especially strong, led by the Buick Excelle subcompact. Cadillac initiated sales in China in 2004, starting with imports from the United States. GM pushed the marketing of the Chevrolet brand in China in 2005 as well, moving the former Buick Sail to that marque. The company manufactures most of its China-market vehicles locally, through its Shanghai GM joint venture. Shanghai GM, a joint venture between the Chinese company SAIC and General Motors, was created on March 25, 1997. The Shanghai GM plant was opened December 15, 1998 when the first Chinese-built Buick came off the assembly line. The SAIC-GM-Wuling Automobile joint-venture is also successful selling trucks and vans under the Wuling marque. Hailey College of Banking and Finance General Motors 46 Financial Highlights Hailey College of Banking and Finance General Motors 47 General Motors Corporation Balance Sheet Annual Financials for General Motors Corporation All amounts in millions except per share 12/2006 12/2005 amounts. (TTM) (TTM) 12/2004 (TTM) 12/2003 (TTM) Assets Cash and Equivalents Restricted Cash Marketable Securities Accounts Receivable Loans Receivable Other Receivable Receivables Raw Materials Work In Progress Purchased Components Finished Goods Other Inventories Inventories -Adj Allowances Inventories Prepaid Expenses Current Deferred Income Taxes Other Current Assets Total Current Assets Gross Fixed Assets (Plant, Prop. & Equip.) Accumulated Depreciation & Depletion Net Fixed Assets Intangibles Cost in Excess Non-Current Deferred Income Taxes Other Non-Current Assets Total Non Current Assets Total Assets Liabilities 24,123.00 0.00 138.00 8,216.00 0.00 5,810.00 0.00 0.00 9,619.00 0.00 -1,508.00 13,921.00 0.00 11,957.00 20,376.00 85,374.00 43,440.00 41,934.00 0.00 0.00 32,967.00 30,726.00 0.00 19,726.00 5,917.00 35,993.00 0.00 21,737.00 21,236.00 0.00 32,554.00 0.00 22,215.00 20,532.00 0.00 0.00 180,849.00 0.00 199,600.00 174,769.00 5,512.00 0.00 0.00 9,875.00 0.00 -1,525.00 13,862.00 0.00 8,982.00 6,993.00 80,170.00 41,627.00 38,543.00 1,869.00 0.00 23,761.00 4,838.00 0.00 0.00 8,321.00 530.00 -1,442.00 12,247.00 0.00 26,559.00 19,934.00 79,661.00 40,641.00 39,020.00 4,925.00 0.00 0.00 98,670.00 4,899.00 0.00 0.00 7,642.00 642.00 -1,581.00 11,602.00 0.00 27,190.00 19,609.00 76,527.00 38,555.00 37,972.00 4,760.00 0.00 0.00 97,304.00 8,216.00 186,766.00 220,836.00 195,301.00 78,731.00267,055.00337,306.00308,471.00 32,560.00 142,928.00 107,461.00207,101.00142,615.00140,036.00 186,192.00474,156.00479,921.00448,507.00 Hailey College of Banking and Finance General Motors Accounts Payable Notes Payable Short Term Debt Accrued Expenses Accrued Liabilities Deferred Revenues Current Deferred Income Taxes Other Current Liabilities Total Current Liabilities Long Term Debt Capital Lease Obligations Deferred Income Taxes Other Non-Current Liabilities 26,931.00 0.00 35,225.00 0.00 0.00 0.00 0.00 42,505.00 0.00 0.00 80,116.00 30,133.00 0.00 42,697.00 0.00 0.00 0.00 37,266.00 28,830.00 0.00 0.00 78,340.00 0.00 0.00 7,078.00 0.00 48 25,422.00 0.00 0.00 73,930.00 0.00 0.00 7,508.00 0.00 5,666.00 255,135.00 67,822.00365,231.00114,248.00106,860.00 32,580.00 300,279.00 271,756.00 0.00 0.00 60,645.00 0.00 0.00 37,637.00 0.00 0.00 44,316.00 Minority Interest 1,190.00 1,047.00 397.00 307.00 Preferred Securities of 0.00 0.00 0.00 0.00 Subsidiary Trust Preferred Equity outside Stock 0.00 0.00 0.00 0.00 Equity Total Non-Current Liabilities 123,811.00 94,272.00338,313.00316,379.00 Total Liabilities Stockholder's Equity Preferred Stock Equity Common Stock Equity Common Par Additional Paid In Capital Cumulative Translation Adjustment Retained Earnings Treasury Stock Other Equity Adjustments Total Equity Total Capitalization 0.00 -5,441.00 943.00 15,336.00 0.00 406.00 0.00 -22,126.00 0.00 14,653.00 943.00 15,285.00 -2,140.00 2,960.00 0.00 -2,395.00 0.00 27,360.00 942.00 15,241.00 -1,194.00 14,062.00 0.00 -1,691.00 0.00 25,268.00 937.00 15,185.00 -1,815.00 12,752.00 0.00 -1,791.00 191,633.00459,503.00452,561.00423,239.00 -5,441.00 14,653.00 27,360.00 25,268.00 37,064.00 47,233.00 327,639.00 297,024.00 Total Liabilities & Stock Equity 186,192.00474,156.00479,921.00448,507.00 Hailey College of Banking and Finance General Motors 49 Income Statement Annual Financials for General Motors Corporation All amounts in millions except per share 12/2006 12/2005 amounts. (TTM) (TTM) 12/2004 (TTM) 12/2003 (TTM) Operating Revenue Total Revenue Adjustment to Revenue Cost of Sales Cost of Sales with Depreciation Gross Margin Gross Operating Profit R&D SG&A Advertising Operating Profit Operating Profit before Depreciation (EBITDA) Depreciation Depreciation Unrecognized Amortization Amortization of Intangibles Operating Income After Depreciation Interest Income Earnings from Equity Interest Other Income, Net Income Acquired in Process R&D Interest Restructuring and M&A Other Special Charges Total Income Avail for Interest Expense (EBIT) Interest Expense Income Before Tax (EBT) Income Taxes Minority Interest Preferred Securities of Subsidiary Trust Net Income from Continuing Operations Net Income from Discontinued 207,349.00194,655.00195,351.00185,837.00 207,349.00 194,655.00 195,351.00 185,837.00 0.00 0.00 0.00 0.00 152,711.00 141,948.00 136,238.00 137,109.00 164,682.00 158,887.00 152,115.00 152,419.00 0.00 0.00 33,390.00 0.00 0.00 0.00 0.00 37,967.00 0.00 0.00 0.00 0.00 31,868.00 0.00 0.00 0.00 0.00 20,957.00 0.00 0.00 54,638.00 52,707.00 59,113.00 48,728.00 21,248.00 14,740.00 27,245.00 27,771.00 11,971.00 0.00 0.00 0.00 9,277.00 2,721.00 184.00 0.00 0.00 0.00 0.00 12,182.00 16,945.00 -2,785.00 0.00 0.00 16,939.00 0.00 0.00 0.00 -2,199.00 1,066.00 562.00 0.00 0.00 0.00 0.00 -571.00 15,607.00 -5,870.00 0.00 0.00 15,877.00 0.00 0.00 0.00 11,368.00 1,400.00 720.00 0.00 0.00 0.00 0.00 13,488.00 11,913.00 1,575.00 -1,126.00 0.00 0.00 15,310.00 0.00 0.00 0.00 12,461.00 0.00 612.00 0.00 0.00 0.00 0.00 13,073.00 9,464.00 3,609.00 710.00 0.00 0.00 -4,763.00 -16,178.00 -1,978.00 -10,308.00 0.00 0.00 2,701.00 0.00 2,899.00 960.00 Hailey College of Banking and Finance General Motors Ops. Net Income from Total Operations Extraordinary Income/Losses Income from Cum. Effect of Acct Chg Income from Tax Loss Carry forward Other Gains (Losses) Total Net Income Normalized Income Net Income Available for Common Preferred Dividends Excise Taxes Per Share Data Basic EPS from Continuing Ops. Basic EPS from Discontinued Ops. Basic EPS from Total Operations Basic EPS from Extraordinary Inc. Basic EPS from Cum Effect of Accounting Chg Basic EPS from Other Gains (Losses) Basic EPS Total Basic Normalized Net Income/Share Diluted EPS from Continuing Ops. Diluted EPS from Discontinued Ops. Diluted EPS from Total Operations Diluted EPS from Extraordinary Inc. Diluted EPS from Cum Effect of Accounting Chg Diluted EPS from Other Gains (Losses) Diluted EPS Total Diluted Normalized Net Income/Share Dividends Paid per Share -3.50 0.00 -3.50 0.00 0.00 0.00 -3.50 -3.50 -3.50 0.00 -3.50 0.00 0.00 0.00 -3.50 -3.50 1.00 -18.23 0.00 -18.23 0.00 -0.19 0.00 -18.42 -18.23 -18.23 0.00 -18.23 0.00 -0.19 0.00 -18.42 -18.23 2.00 4.78 0.00 4.78 0.00 0.00 0.00 4.78 4.78 4.76 0.00 4.76 0.00 0.00 0.00 4.76 4.76 2.00 -1,978.00 -10,308.00 0.00 0.00 0.00 0.00 0.00 -109.00 0.00 0.00 2,701.00 0.00 0.00 0.00 0.00 2,701.00 2,701.00 2,701.00 0.00 0.00 50 3,859.00 0.00 0.00 0.00 0.00 3,859.00 2,899.00 2,899.00 0.00 0.00 -1,978.00 -10,417.00 -1,978.00 -10,308.00 -1,978.00 -10,308.00 0.00 0.00 0.00 0.00 5.17 2.14 7.31 0.00 0.00 0.00 7.31 5.17 5.09 2.11 7.20 0.00 0.00 0.00 7.20 5.09 2.00 Cash Flow Statement Hailey College of Banking and Finance General Motors Annual Financials for General Motors Corporation 12/2006 12/2005 All amounts in millions except per share amounts. (TTM) 51 (TTM) 12/2004 (TTM) 12/2003 (TTM) Operating Activities Net Income (Loss) Depreciation Amortization Amortization of Intangibles Deferred Income Taxes Operating (Gains) Losses Extraordinary (Gains) Losses (Increase) Decrease in Receivables (Increase) Decrease in Inventories (Increase) Decrease in Prepaid Expenses (Increase) Decrease in Other Current Assets (Increase) Decrease in Payables (Increase) Decrease in Other Curr Liabs. (Increase) Decrease in Other Working Capital Other Non-Cash Items Net Cash from Continuing Operations Net Cash from Discontinued Operations Net Cash from Operating Activities Investing Activities Sale of Property, Plant, Equipment Sale of Long Term Investments Sale of Short Term Investments Purchase of Property, Plant, Equipment Acquisitions Purchase of Long Term Investments Purchase of Short Term Investments 7,039.00 0.00 5,362.00 1,355.00 7,696.00 0.00 4,148.00 0.00 -7,091.00 0.00 0.00 -1,978.00 -10,417.00 0.00 1,021.00 0.00 407.00 0.00 0.00 0.00 0.00 427.00 0.00 0.00 0.00 1,142.00 0.00 0.00 0.00 0.00 0.00 -1,155.00 0.00 0.00 2,701.00 0.00 1,675.00 0.00 0.00 0.00 0.00 0.00 614.00 0.00 0.00 -3,570.00 7,710.00 9,356.00 0.00 2,899.00 1,797.00 0.00 0.00 0.00 -5,811.00 -518.00 -578.00 0.00 4,165.00 198.00 186.00 915.00 -3,176.00 0.00 10,950.00 15,797.00 14,202.00 13,513.00 2,739.00 -13,976.00 -19,942.00 -32,429.00 -33,950.00 9,843.00 8,988.00 -11,759.00 -16,856.00 0.00 0.00 11,759.00 16,856.00 9,356.00 -3,176.00 28,549.00 22,537.00 15,911.00 24,253.00 -25,064.00 -23,942.00 -22,403.00 17,859.00 -357.00 846.00 0.00 0.00 -60.00 -25,530.00 -21,800.00 -15,278.00 -28,660.00 Hailey College of Banking and Finance General Motors Other Investing Changes Net Cash from Disc. Investing Activities Net Cash from Investing Activities Financing Activities Issuance of Debt Issuance of Capital Stock Repayment of Debt Repurchase of Capital Stock Payment of Cash Dividends Other Financing Charges, Net Cash from Disc. Financing Activities Net Cash from Financing Activities Effect of Exchange Rate Changes Net Change in Cash & Cash Equivalents Cash at Beginning of Period Cash at End of Period 0.00 19,695.00 0.00 8,565.00 0.00 52 17,199.00 24,207.00 -13,929.00 -37,091.00 0.00 28,063.00 44,441.00 86,599.00 78,276.00 75,703.00 97,626.00 0.00 0.00 -563.00 2,487.00 0.00 -3,767.00 365.00 0.00 0.00 -1,134.00 6,030.00 0.00 0.00 0.00 -1,129.00 4,723.00 0.00 60.00 0.00 -1,121.00 1,320.00 0.00 -92,290.00 -79,692.00 -57,822.00 -38,962.00 3,480.00 21,475.00 58,922.00 -85.00 671.00 929.00 4,534.00 -4,896.00 3,439.00 12,234.00 19,589.00 35,622.00 32,554.00 20,320.00 24,123.00 30,726.00 35,993.00 32,554.00 Hailey College of Banking and Finance
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