TYPE: 425
SEQUENCE: 1
DESCRIPTION: FILING OF COMMUNICATION
Filed by General Motors Corporation (GM)
Subject Company - General Motors Corporation
Pursuant to Rule 425 under the Securities Act of 1933
File No. 333-30826
The following communication contains forward-looking statements within the
meaning of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Reference made in the following are based on management's
current expectations or beliefs and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements.
The principal risk factors that may cause actual results to differ materially
from those expressed in forward-looking statements contained in this
communication are described in various documents filed by GM with the U.S.
Securities and Exchange Commission (SEC), including GM's Current Reports on Form
8-K dated April 12, 1999, and Filed on April 15, 1999, and April 21, 1999.
The following Newsletter goes out with the March 2000 dividend check or dividend
reinvestment statement to all registered stockholders. It is also sent in a
stockbrokers' mailing to all beneficial stockholders.
* * * * * * * * * *
(GM Bug) General Motors Logo
Stockholder News
Volume 6, Issue 1
March 2000
Keeping you informed about your investment in General Motors
GM Reports Record Annual Revenues & Earnings
GM reported record calendar-year revenues and earnings for 1999, fueled by
the continued strong performance of its automotive operations and record
earnings at General Motors Acceptance Corporation (GMAC).
GM's consolidated net sales and revenues totaled a record $176.6 billion
in calendar-year 1999, an increase of 13.6 percent compared with the prior year.
Revenue growth last year helped drive a record $8.53 diluted earnings per share
of GM $1-2/3 par value common stock, compared with $4.32 per share in 1998.
Income during 1999 totaled $5.6 billion, compared with $3.0 billion in
1998.
Strong performance at GM North America and GMAC resulted in strong
fourth-quarter adjusted earnings per share of $1.95 on a fully diluted basis,
exceeding analysts' consensus forecast by $0.14.
Continued focus on improved earnings and asset efficiency drove
calendar-year return on net assets (RONA) of 14.0 percent (excluding the Hughes
Electronics Corporation subsidiary), well above the 12.5-percent target. GM
Chairman and Chief Executive Officer John F. Smith, Jr., said, "We are focused
on further improving this performance to maintain our financial strength and
provide a superior return to our stockholders."
Stockholders also benefited by the completion during the fourth quarter of
GM's $4.0 billion share repurchase program. Since January 1997, GM has
repurchased approximately 140 million shares of GM $1-2/3 par value common stock
worth $9.0 billion, or more than 18 percent of the total shares outstanding.
Hughes Electronics' performance in 1999 is worthy of special mention. Its
net sales and revenues for the year increased 25 percent to $7.6 billion, from
$6.1 billion in 1998. "The revenue increase was primarily driven by continued
growth in the DIRECTV business," Smith said. The ongoing robust growth of this
business continues to support the higher market valuation of Hughes.
Hughes' net loss in the 1999 fourth quarter and calendar year was
primarily related to investments in growth opportunities, which are expected to
result in increased revenues and profits in the future.
"As we close the books on the decade of the `90s, we feel we've taken a
number of important steps to secure the future of General Motors," Smith said.
"Very significant among these were our strong financial turnaround; the
restructuring of the corporation with the separation of Delphi Automotive
Systems, Hughes Defense, and Electronic Data Systems; the global integration of
our automotive operations and expansion of our strategic global alliances; and
our aggressive move into e-commerce, including the establishment of e-GM and GM
TradeXchange."
(Caption):
For complete reports on GM's earnings, its plans for Hughes, and management
changes, go to the Investor Information section of the corporate Web site,
www.gm.com.
Wagoner Elected CEO & President
The General Motors Board of Directors has elected G. Richard Wagoner, Jr.,
47, chief executive officer and president, effective June 1, 2000. Currently, he
is president and chief operating officer. In his new capacity, Wagoner has
responsibility for the strategic and operational leadership of General Motors.
John F. Smith, Jr., 61, currently chairman and chief executive officer,
will continue as chairman and maintain his key role of building strong
relationships with GM's business partners, unions, and dealers; with governments
around the world; and with external business groups. He will also act as the
primary interface between the Board of Directors and GM management.
Harry J. Pearce, 57, vice chairman, will continue in that position and
will continue to provide oversight for Hughes Electronics. He maintains
responsibility for Allison Transmission Division and GM Locomotive Group. He
will also continue to be responsible for GM's focus on advanced vehicle
technology, safety, the environment, and key public policy issues.
Wagoner, Pearce, and Thomas A. Gottschalk, GM's general counsel, will
continue to report to Smith. The company's chief financial officer and General
Motors Acceptance Corp. will be realigned to report to Wagoner. Smith, Wagoner,
and Pearce continue as GM directors.
Smith said the Board's action was part of its continuing succession
planning activity and that it will maintain continuity at the senior-most
executive level and further build on the momentum General Motors has generated
over the past several years.
"Rick's being elected chief executive officer is not only a reward for
what he's accomplished, but is a vote of confidence that he can take GM to even
greater heights in terms of products, services, and shareholder value," Smith
said.
"While it's gratifying to have Jack's and the Board's confidence, it's
clear that winning in today's competitive global auto industry is a team sport,"
Wagoner said. "The progress we've made at GM in recent years is the result of a
lot of great people working together with a focus on winning. And that's
certainly what we'll need in the future as well.
"I'm very pleased that the Board is keeping the leadership team in place,"
Wagoner added.
(Photo of Richard Wagner, Jr.)
(Caption)
G. Richard Wagoner, Jr.
Planned Exchange of Stock To Release Stockholder Value
General Motors in February announced plans for a broad restructuring of
its economic interest in Hughes Electronics (Hughes), including an offer to its
stockholders to repurchase GM $1-2/3 par value common stock in exchange for
approximately $8 billion of GM Class H common stock, and contributions of
approximately $7 billion of Class H stock to GM benefit plans.
GM's planned exchange of approximately $8 billion of Class H stock for GM
$1-2/3 stock would significantly reduce the number of shares of GM $1-2/3 stock
outstanding and translate to a significant increase in GM's earnings per share.
GM expects to complete the proposed transaction during the second quarter of
this year.
The contributions to the benefit plans, which are not subject to any
regulatory approvals, will significantly reduce annual pension and other
post-retirement employee benefit (OPEB) expense and will strengthen the
company's overall financial position.
"GM has a strong and consistent track record of finding ways to return
value to shareholders, and that record is being extended through these proposed
transactions," said GM Chairman and Chief Executive Officer John F. Smith, Jr.
"GM will strive to continue to increase earnings with less capital employed.
This is an excellent formula to deliver superior shareholder returns."
GM has no current plans or intention to separate Hughes or any of its
businesses from GM, whether by means of a spin-off, split-off, or any other
transaction. However, GM will continue to evaluate what Hughes ownership
structure would be optimal for the two companies and GM stockholders.
GM has the flexibility to use the economic interest that it retains in
Hughes in a variety of ways, including as a currency for additional GM $1-2/3
stock repurchases, acquisitions, benefit plan contributions, to raise cash
proceeds in a tax-efficient manner, or to implement further corporate
restructurings.
(Caption)
STOCKHOLDERS ARE URGED TO READ THE IMPORTANT INFORMATION IN GM'S PROSPECTUS
RELATING TO THE EXCHANGE OFFER, WHICH WILL BE FILED WITH THE SEC AND BECOME
AVAILABLE FREE OF CHARGE AT ITS WEB SITE, www.sec.gov, AT GM'S WEB SITE, AND
FROM GM STOCKHOLDER SERVICES. THIS COMMUNICATION DOES NOT CONSTITUTE AN OFFER TO
SELL OR SOLICITATION TO BUY IN CONNECTION WITH THE PLANNED EXCHANGE OFFER, WHICH
WILL ONLY BE MADE BY MEANS OF AN APPROPRIATE PROSPECTUS.
(Photo of GM Class H Stock Certificate)
GM Shows Strength & Diversity at Auto Shows
In the first three months of 2000, GM demonstrated the strength and depth
of the corporation and the diversity of its brands by introducing nine all-new
and highly innovative concept vehicles at the world's leading auto shows from
Los Angeles to Geneva.
Rather than create a single "house style" for all of GM, the new concept
vehicles establish a trademark look for each brand, building equity,
communicating intrinsic product values, and emotionally connecting with
customers. They are radically different from each other but share two
characteristics: versatility and compelling design.
In Detroit, alone, at the North American International Auto Show in
January, five GM concept vehicles (plus two innovative new production vehicles)
debuted at the 164,456-square-foot display, The GM Experience, the largest
showcase ever presented at a North American auto show. They included:
1. The Buick LaCrosse, a stylish luxury sedan that converts to a carrier of
oversized cargo when panels reveal a pickup-type bed.
2. The GMC Terradyne, redefining the pickup truck for the 21st century with
emphasis on innovations and industrial precision design.
3. The Opel Zafira Snowtrekker, a sporty, lifestyle-oriented compact van.
4. The Chevrolet SSR, a stunning performance roadster with a power
retractable hardtop roof and a cargo bed.
5. The General Motors Hummer H2 vision vehicle, modernizing and updating the
Hummer while drawing on its traditional strength and toughness.
The innovative new production vehicles taking their bows in Detroit included:
6. The 2001 Pontiac Aztek, a sport recreation vehicle (SRV), which fuses
attributes of the sport sedan, sport utility vehicle, and minivan, arriving in
GM showrooms this summer.
7. An auto-show version of the Chevrolet Avalanche, representing the creation
of an entirely new "ultimate utility vehicle" segment, expected in Chevrolet
showrooms in a production version during the 2001 calendar year.
GM's Detroit auto-show performance played to rave reviews, with James
Hall, vice president of industry analysis for AutoPacific, Inc., for example,
calling GM "the star of the show."
Two other concept vehicles took their bows in Los Angeles in January: the
Saturn CV1, an all-wheel-drive, multi-functional vehicle; and the Oldsmobile
Profile, a sophisticated sports sedan with all-wheel-drive, power-sliding rear
doors, and a host of electronic convenience features.
At February's Chicago Auto Show, two more concepts were introduced: the
Chevrolet Traverse, not a car, not a truck, but the best of both in this
exploration to re-invent the Chevy family sedan; and the Pontiac Piranha, a
performance-oriented, four-seat, supercharged coupe with a removable trunk. The
2002 production model Buick Rendevous -- a new type of SUV -- was also unveiled.
Finally, in Geneva this month, GM revealed Cadillac's concept car, the
Imaj, the ultimate luxury sedan designed to be chauffeured in during the week
and to personally drive over the weekend.
(Photo of Montage of Concept Vehicles)
GM Views the Issues:
Does GM Support China's Admission to the World Trade Organization?
The World Trade Organization serves a critical role in promoting the
smooth, predictable, and free flow of world trade. As the WTO fulfills this
important mission within a growing, global economy, GM supports China's
admission to the organization on commercially viable terms as soon as possible.
A WTO without one of the world's largest and rapidly growing economies
simply cannot remain effective or relevant.
China's admission to the WTO is consistent with GM's efforts as a global
company to move goods and services freely throughout the world. China's entry is
necessary to: improve U.S.-China commercial relations; promote China's adherence
to global trading rules and norms; and enhance opportunities for U.S. firms to
gain access to China's rapidly emerging consumer-based market. Exports to China
create and sustain U.S. jobs, while imports from China enhance consumer choice
in the U.S. and support China's transition to a market-based economy.
GM realizes that China's admission to the WTO -- and free and open trade
in general -- can create concerns that American jobs could be exported to other
countries. However, the results of open trade speak for themselves. Since
implementation of major international trade agreements in the mid-O90s, the U.S.
is now enjoying the lowest unemployment rate in over three decades. Indeed,
trade is a positive sum game; increased trade creates jobs in the U.S. as well
as in trading partners.
Also, the issue of free trade must address a responsibility to human
rights and the environment. China's WTO membership will give the U.S. and other
WTO members confidence that China will abide by internationally accepted trade
rules. Evidence suggests that the presence of American firms in China is helping
to promote change by providing increased exposure to Western norms and business
practices. Experience from other countries, especially Asian countries, suggests
that political freedoms follow economic freedoms.
GM Stockholder Services: Mail Code 482-C38-B71, 300 Renaissance Center, P.O.
Box 300, Detroit, MI 48265-3000, (313) 667-1500, www.gm.com
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Of Special Interest to Stockholders
Annual Meeting Voting
Annual Meeting season is fast approaching and, as an owner of the company,
your vote is important to General Motors. We encourage you to read your Annual
Report and Proxy Statement and vote your shares in one of three convenient ways:
Telephone Voting: Your proxy materials will include telephone voting
instructions and a toll-free number to call to register your vote. The simple,
automated system requires only a few minutes to vote your shares.
Internet Voting: Your proxy package will also provide a Web site address
(URL) and instructions for voting your General Motors shares on the Internet.
This site provides easy-to-follow instructions for quick and confidential voting
of your GM shares.
Traditional Mail: A voting card and envelope will accompany all proxy
materials mailed to GM stockholders. Investors not electing to use telephone or
Internet voting may complete and mail the voting instruction card to cast their
vote.
The telephone and Internet are the most cost-effective methods of voting
your GM shares. We encourage you to use them to cast your 2000 vote. Please do
not send the voting card if you are voting by telephone or the Internet.
Direct Registration Is Standard
General Motors is now a "Direct Registration" company. That means future
stock issued by General Motors to registered stockholders will be held
electronically - "on account" in book-entry form -- by EquiServe, the
corporation's stock transfer agent and registrar.
The new system will not affect paper stock certificates currently held by
stockholders. New paper certificates will not be issued unless specifically
requested by stockholders.
Under the Direct Registration System (DRS), stockholders retain all the
rights and privileges of ownership of their shares without the necessity of
safely storing and keeping track of paper certificates. Rather, stockholders
track their shares through DRS confirmation statements issued by EquiServe at
the time of any activity in a DRS account.
Other important advantages include:
o DRS eliminates the requirements for physical movement of certificates at the
time of sale, and the accompanying potential for loss.
o DRS transactions, such as share transfers and sales, can be processed
electronically and, therefore, more efficiently.
o DRS eliminates the risk and cost associated with replacing a lost
certificate.
DRS should not be confused with GM's Dividend and Cash Investment Plan.
Stockholders will continue to receive cash dividends under DRS and will not be
enrolled in the Dividend and Cash Investment Plan unless they request it from
EquiServe.
Questions about DRS should be directed to EquiServe at 1-800-331-9922.
