WAGONER REVIEWS GM FIRST QUARTER RESULTS

CEO Rick Wagoner hosted the First Quarter Business Update broadcast live from the São Caetano complex in São Paulo, Brazil. He was there to help GM do Brazil celebrate their 75th anniversary and to share GMLAAM's successes in operationalizing the business priorities.

Wagoner opened the broadcast by noting that analysts' expectations for the first quarter were actually lower than the results. "The press reviews of the results will probably be somewhat positive," said Wagoner. "But the message I want to leave with the GM team is that just because expectations are lower, it doesn't mean we should be happy with these lower results."

GM's revenue growth was down 1.1 percent on a per-year basis. Wagoner reinforced the GM vision of reaching higher growth. "We should be trying for 6 to 8 percent revenue growth," he said.

GM's net margin for the quarter was at .8 percent. This is slipping in comparison to the expected net margin of Ford. Wagoner expressed disappointment with this performance by stating, "I can understand we have tougher times and may lose some sales and some margin, but I don't like to see us losing ground against our competitors."

GM's return on net assets (RONA) was at 5.1 percent for the quarter and our stock price was up 4 percent. Neither of these meet GM's vision objectives. Global market share improved slightly, but was still short of the objective.

Although GM is not making the improvements needed in our business results, other business priorities are showing plenty of progress. There is a lot going on in the corporation to create and build innovative products and services. "We are continuing to push in this area, despite hard financial times," said Wagoner.

"Probably as important as showing new product," Wagoner said, "we're actually getting more innovative products into production. A good product that's innovative can get GM the advantage in the marketplace and on the bottom line."

GM's global alliance strategy is continuing to produce results. The Duramax diesel engine, which powers the new heavy-duty Silverado and Sierra, is being very well received in the marketplace. Wagoner pointed out that "Our partnership with Isuzu to produce the Duramax 1.7L direct injection diesel is a great endorsement for working together as a global team, which brings better results than if we do things on our own."

This quarter's e-business progress was not limited to online vehicle sales. GM announced a new venture to equip doctors with technology as a way of improving accuracy of prescriptions and reducing the likelihood of medical mistakes. Another initiative underway with UNext will allow global salaried employees access to executive and management development courses and an online M.B.A. program. "It has been called the biggest corporate move to Internet education that anyone has undertaken so far," said Wagoner.