SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) September 28, 2000
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GENERAL MOTORS CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
300 Renaissance Center, Detroit, Michigan 48265-3000
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313) 556-5000
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ITEM 5. OTHER EVENTS
On September 28, 2000, a news release was issued by Hughes Electronics
Corporation's (Hughes) subsidiary, PanAmSat, regarding the operation of its
Galaxy VIII-i satellite. The release is as follows:
PANAMSAT'S SATELLITE DEPLOYMENT PLAN ASSURES
CONTINUOUS SERVICE FOR GALAXY VIII-i CUSTOMER
Galaxy VIII-i Is Operating Normally After Propulsion System
Difficulties; GLA Will Use Galaxy IIIC, Which Is Already Under Construction
For Launch Next Year; Agreement in Principle Reached With GLA To Build Galaxy
VIII-iR Replacement Satellite
GREENWICH, Conn., September 28, 2000 - PanAmSat Corporation (NASDAQ: SPOT)
announced today that the Galaxy VIII-i satellite has recently experienced
difficulties with its primary propulsion system that are expected to shorten
its projected operational life. The company's ongoing satellite deployment
plan, however, is expected to assure continuous service for the Galaxy VIII-i
customer because Galaxy IIIC is already under construction and scheduled for
launch next year, a full year before the projected end of operational life
for Galaxy VIII-i.
In addition, PanAmSat has reached an agreement in principle with Galaxy Latin
America (GLA), the Galaxy VIII-i customer, to build the Galaxy VIII-iR
replacement satellite to assure against a Galaxy IIIC launch failure and
provide for a more robust in-orbit back-up configuration. This agreement is
subject to approval by the boards of directors of PanAmSat and GLA.
Galaxy VIII-i recently experienced difficulties with its xenon ion propulsion
system (XIPS), an electric propulsion system that is used to maintain the
spacecraft's proper orbit and attitude. The satellite is operating normally
on its backup chemical propulsion system. PanAmSat and the manufacturer are
continuing to investigate the causes of the difficulty and possible
solutions. Without the use of XIPS, the spacecraft is expected to reach its
end-of-life in late 2002.
Galaxy IIIC is under construction and expected to be launched into the same
orbital location as Galaxy VIII-i during the second quarter of 2001. At that
time, GLA will transition to Galaxy IIIC as its primary transmission
platform, which will not require re-pointing of any consumer dishes. Galaxy
VIII-i will continue to be used for some additional services.
"As the world's largest commercial satellite operator, we have the capability
to offer unparalleled backup and redundancy for our customers. As part of
our ongoing satellite expansion effort, we are already building Galaxy IIIC
in order to assure seamless, long-term service for GLA," said R. Douglas
Kahn, PanAmSat's president and chief executive officer.
PanAmSat operates five other HS 601 HP spacecraft that contain XIPS and one
HS 702 spacecraft that uses the XIPS propulsion system. By mid-2001,
PanAmSat plans to launch one additional HS 601 HP spacecraft, and two HS 702
spacecraft, all of which use a XIPS propulsion system. The HS 702s use a
different XIPS system. Based on the information furnished to PanAmSat by
Hughes Space & Communications Company, the manufacturer of the XIPS-equipped
satellite, and PanAmSat's experience with XIPS, PanAmSat believes that this
difficulty on Galaxy VIII-i is an incident that will not affect the
performance of XIPS on those other spacecraft.
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PanAmSat expects that the reduced in-orbit life of Galaxy VIII-i will not
have a material impact on the company's projected revenues through 2002.
PanAmSat intends to accelerate depreciation of the spacecraft to reflect its
revised operational life, resulting in an increase in its projected
depreciation expense beginning in the fourth quarter of 2000 of approximately
$15 million per quarter, which may not be offset by insurance proceeds. It
is anticipated that the reduced life will result in a reduction of backlog in
the ten-year period after 2002 of approximately $350 million, which would be
more than offset by the potential addition to backlog from the Galaxy VIII-iR
satellite.
If the replacement satellite is launched to serve GLA's additional capacity
needs, the resulting backlog would more than offset the loss of backlog on
Galaxy VIII-i.
Until the successful launch and in service placement of Galaxy IIIC, GLA also
has backup rights to preemptible transponders on Galaxy IIIR. However, given
the capacity that continues to be available on Galaxy VIII-i, the new
capacity on the Galaxy IIIC satellite to be made available in 2001, and the
agreement in principle to provide capacity on the additional replacement
satellite, PanAmSat considers it highly unlikely that this situation will
occur.
Galaxy VIII-i, an HS 601 HP satellite built by Hughes Space and
Communications, was launched in December 1997 and provides Ku-band coverage
of Latin America. Galaxy IIIC is a Hughes-built HS 702 spacecraft that will
provide C-band and Ku-band coverage of the Americas upon its launch during
the second quarter of 2001.
PanAmSat is a leading provider of global video and data broadcasting services
via satellite. The company builds, owns and operates networks that deliver
entertainment and information to cable television systems, TV broadcast
affiliates, direct-to-home TV operators, Internet service providers,
telecommunications companies and corporations. With 21 spacecraft in orbit
today, PanAmSat has the world's largest commercial geostationary satellite
network. The company will expand its global fleet to 24 spacecraft by late
2001. For more information about PanAmSat, visit the company's web site at
http://www.panamsat.com.
NOTE: The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements so long as such information is
identified as forward-looking and is accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in the information. When used in this
press release, the words "estimate," "plan," "project," "anticipate,"
"expect," "intend," "outlook," "believe," and other similar expressions are
intended to identify forward-looking statements and information. Actual
results may differ materially from anticipated results as a result of certain
risks and uncertainties, which are more specifically set forth in the
company's annual report on Form 10-K for the year ended December 31, 1999 on
file with the Securities and Exchange Commission. These risks and
uncertainties include but are not limited to (i) risks associated with
technology (including without limitation, delayed launches, launch failures
and in-orbit failures), (ii) regulatory risks, including the ability to obtain
export licenses, (iii) risks of uninsured loss, (iv) risks associated with the
Company's new Internet initiatives, and (v) litigation. PanAmSat cautions that
the foregoing list of important factors is not exclusive. Further, PanAmSat
operates in an industry sector where securities values may be volatile and may
be influenced by economic and other factors beyond the Company's control.
# # #
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
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(Registrant)
Date October 2, 2000
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By
/s/Peter R. Bible
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(Peter R. Bible,
Chief Accounting Officer)
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