GM: Focus is on health-care costs, Delphi
WILMINGTON, Del. (Reuters) -- General Motors' priorities for this year
include concluding a deal to allow its former parts subsidiary Delphi
Corp. to emerge from bankruptcy and cutting its own health-care costs,
the automaker's chief executive said today.
"We'll continue to drive for cost-effective agreements to resolve the
Delphi restructuring and to further reduce our still unsustainable
health-care bill, which was a staggering $4.8 billion in 2006," GM Chief
Executive Rick Wagoner told shareholders in a statement at the start of
the company's annual meeting.
Separately, Wagoner said in response to a question that GM had not
considered going private like its smaller rival Chrysler Group, which
was acquired in May by Cerberus Capital Management in a $7.4-billion deal.
"At this time, GM has not considered and is not considering going
private," Wagoner said.
GM has been in negotiations with Delphi and the United Auto Workers
union since late 2005 over a range of issues centered on contractual
terms for the unionized work force of the parts supplier as it emerges
Delphi remains GM's largest supplier and a work stoppage at the company
has been seen as a lingering risk to GM, which estimates its exposure to
Delphi at $7 billion.
GM, like Ford Motor Co. and the Chrysler group, also faces its own
contract talks with the UAW this summer aimed at replacing a four-year
deal on wages, benefits and work terms that expires on Sept. 14.
GM lost an estimated $1,436 for every car sold in North America last
year, and Wagoner said the automaker would be looking to the upcoming
UAW negotiations to increase its cost-competitiveness.
"We've made a lot of progress with UAW leadership in the past several
years and we look forward to building on that in upcoming negotiations,"
Separately, Wagoner said GM is considering restructuring and selling its
medium-duty truck unit.
Wagoner told investors that the automaker is also "looking at offers" to
sell its Allison Transmission subsidiary. GM earlier this year said it
was considering strategic options for the Indianapolis-based division,
which makes transmissions and hybrid propulsion systems for commercial
trucks, buses and military vehicles.
CFO Fritz Henderson said GM is "actively addressing" accounting issues
it mentioned in its last annual report. The automaker filed its annual
report in March after a six-week delay, which it blamed on recurring
accounting problems, and said its internal controls on financial
reporting had been ineffective.
GM pledged to tighten its financial controls after twice restating
results and delaying its fourth-quarter report.
"We are actively addressing the issues we identified in the annual
report," Henderson said at the Delaware meeting.
"We have a new controller, a new chief accountant," he said. "We've
brought in over 30 accountants since the annual report ... to address
the shortage of skilled people."
GM last month said U.S. securities regulators were reviewing its
accounting for foreign exchange and commodity derivatives and said a
similar hedge-related probe into its former finance arm, General Motors
Acceptance Corp., could force it to restate results again.