Attending The 2006 General Motors Annual Meeting

GM Corporate Stockholder Meeting Photograph From 2011

GM Annual Corporate Meeting

General Motors Corporation has an Annual Meeting that is open to shareholders, once a year. From 1995 to 2010 the GM Annual Meeting was held in Wilmington, Delaware. Shown above is a GM Corporate photograph from the 2011 Annual Shareholder Meeting. In 2006 I attended the GM Annual Meeting in Wilmington, Delaware.

To Attend the GM Annual Meeting

To attend you have to be a stockholder and register to attend. Here is the sheet with all of the information you need to fill out and submit in advance. Shown in the graphic box is what you receive back. Note that cameras are not permitted.

GM Requirements To Attend Annual Meeting

The Audience

There were about 60 to 70 people in the audience. Maybe 1/3 were reporters. Some people were on the schedule to speak for a few minutes. And the rest in the audience, well we were there to experience something that we had not experienced before.

 GM Representaiton

The GM  Board of Directors was well represented and President Rick Wagnoner did most of the communication. It was all very GM Professional, which means that it was about as good as you expect it to be.

 The Reality

General Motors filed for bankruptcy three years after this annual meeting. Long before coming to the meeting some key ideas continued to run through my assessment of GM:

• market share loss of approximately 1% per year
• weak consumer image of product quality and integrity
• challenge by the Japan 3 (J3) – Toyota, Nissan and Honda
• challenge by the Koreans – Huyndai and Kia
• Board Of Directors non-recognition of challenges on the horizon
• too many brands and not enough great product
  

  Wards Automotive Production Data

It was interesting to attend the Annual GM Shareholder meeting. Wilmington was probably far enough away from Detroit that only a small and dedicated percentage of shareholders would attend. No real hard questions surfaced associated with product, market share, and huge challenges on the horizon.

A Final Observation

After the meeting just about all of the GM Board got on the same elevator to exit the meeting. This seems symbolic for what was going to happen as I observed them entering the elevator.

GM Today

GM Today is not the same company it was. However, those five challenges identified above are still there today.

Is GM Old Board Guilty of Corporate Mismanagement and Can the New GM Board Save the Company?

GM Is A Lost Vision

I remember watching GM CEO Roger Smith in a GM Corporate Teleconference in 1984 or 1985 indicating that GM had committed the necessary resources to set up Saturn and the research of Alex Maier that supported the idea.

At that time, in the mid 1980’s GM had about 50% market share and Oldsmobile sold about 1 million cars per year. Today’s sales are about 10 million units annually so using these numbers the Oldsmobile 1/10 = 10% of total sales. This is bad math, but it illustrates a point. Recent year sales have been about 16 million units so 6.25%.

Will the New GM Survive

On a very somber note GM will get smaller than anyone imagines, now that GM has gotten past the bankruptcy chaos. It is our assessment that in three years GM will be smaller than Ford and about the size of Honda.

GM Market Share Falling

Currently, GM talks about maintaining 19% of the U.S. market, but that’s not going to happen. Before bankruptcy, in the first four months of 2009, GM had 19.2% of the market. Car divisions to be shut down include Pontiac, Saturn, Hummer and Saab representing 2.8 points, which calculates to 16.4% remaining.

Continuing the calculation let’s look at Buick-Pontiac-GMC where Pontiac accounts for one-third of their sales.  A second factor are fuel prices that will increase and third, EPA MPG requirements that will increase all combine to hammer GMC’s pickups and sport utility vehicles which means that GMC will see a sales decline.  Today’s market share is 13% for Chevy and Cadillac.  Projecting forward would be to take the 13% add in GMC & Buick and then adjust the numbers ahead 3 years. This is a sobering calculation which leads us to believe that GM will be about the size of Honda in 3 years.

GM Corporate Mismanagement

At that GM teleconference I was thinking about a statement made by a regional Division Manager of Oldsmobile anyone that messes with Oldsmobile is crazy. GM Corporate starved and neglected Oldsmobile and the entire GM product line.

The Automotive Tribune does not have an attorney on the staff but in our assessment it certainly seems that this type of GM Corporate Neglect in the Boardroom and CEO Corner Office represents a Civil Crime. GM’s Board of Directors (with a few exceptions who raised their voice and were shown the door) were dead to the reality of what was going on.

Was GM’s Board Guilty of a Civil Crime

That question can only be resolved by a Jury. As a Car Guy your Tribune Editor is of the opinion that the Jury would come back with the Decision that the GM Board was Negligent in their Responsibilities.

If the Jury questions were expanded to include Selected GM Corporate Officers that would prove to be really interesting. The Late Roger Smith was recognized as #13 in the CNBC list of Worst American CEO’s of All Time. … Continue Reading

GM — The Clock Is Ticking

Not Business As Usual

The GM Board of Directors will meet on September 8 – 9, 2009 and this certainly appears to not be the same old “ribber stamp” from the Board.  The Wall Street Journal had a very significant article about ChairmanEdward E. Whitacre, Jr and his no-nonsense approach to the basic business of GM.

Sell Cars, Keep Market Share, Make A Profit

The basic business of GM, in the simplest of terms, includes selling cars, keeping and increasing market share, and making a profit.  These are the most basic of business issues.  For the past 30 years, GM has has been a failure on all points, a fact that has been addressed in the Tribune.

Boardroom Direction

Serving on a Board of Directors affords the Director an opportunity to participate in strategic decision making for the Company.  If the Company runs into a wall or loses direction the Board has responsibility.  If the Board is apathetic or follows directions from the Company Management then the Board has given up control.  This terrible condition has been in place at GM for so long that the Board became a “rubber stamp” for Company Management.  This terrible condition of Boardroom Apathy has permitted GM to crash.  Jerry York served, arguably as a dissident Board Member, on the GM Board and made a notable presentation at the Society of Automotive Analysts’ 18th annual Automotive Outlook Conferencein Detroit on January 10, 2006.  This transcript provides an intuitive insight into the domestic and international manufacturers.

Tough Talk From Mr. Whitacre

The WSJ reported that Whitacrewas going to push GM and the Board.  One particular statement is paramount today.  ‘”He’s said to us that ‘you’ve been given a clean balance sheet, now apply the same focus to market share and sales,” said one person familiar with Mr. Whitacre’s views.’

Boardroom Deadlines

GM plans to have a public offering to sell stock in about 12 months to pay back part of the $50 billion the US Government has given it.  For this to successfully happen there must be a successful business plan must be implemented immediately.

Public Relations Are Paramount

Above all GM must have a PR campaign that communicates the strengths of the Company that was in bankruptcy for 40 days.  Financial analysis in addition to the common investor will look at the GM stock offering very carefully.  If GM is to be successful then they must put a positive spin on what is going on, in addition to getting people to buy their current product line.

Action Now

GM must get the car business right and they must do it now.  The seriousness of what is happening now cannot be underestimated.