General Motors Co (NYSE:GM) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
European Breakeven Point
John Murphy – Bank of America-Merrill Lynch: First question on Europe given the great performance there. Is there any consideration in moving forward your target from 2015 to 2014 on your breakeven there because everything you’re doing is real self-help, getting a lot of help from the market itself, you’re really creating this performance on your own. I’m just curious what your thoughts are there?
Daniel Ammann – SVP and CFO: Yes John, we don’t have an updated target at this point in time. We’re a few quarters into our plan and executing to our plan, the market environment remains quite challenging as you’re well aware. So, we’re pleased with the year-over-year improvement we’ve shown through the first half of the year. We do typically have as you know some seasonal challenge more in the second half, so we’re going to work to – work our way through that, but we’re pleased with the performance so far, but still long way to go, particularly in the macroeconomic environment.
Daniel F. Akerson – Chairman and CEO: John, we’re pleased not satisfied. We’re going to continue to push both play offense and defense. The new product rollouts will help on offense, but we’re going to continue to focus on taking cost out of the business.
John Murphy – Bank of America-Merrill Lynch: Second question, Chuck maybe on pickup pricing. It’s been much stronger than expected. I know on the new truck versus the old truck you are keeping MSR piece flat but obviously that’s not the full story on average transaction prices. I am just curious, is there the possibility that you might get even better pricing than you initially expected on the new truck in the back half of the year because the pricing on the outgoing truck has been better than expected?
Chuck Stevens – CFO, GM North America: I think it is too early to make predictions about whether we are going to have upside or not on the new truck. We just launched in the month of July, about 20% of our sales will be the new truck, it is just the crew cab. I would say that what we’ve seen in the market over the last three or four months with the stronger segment share our performance with the outgoing GMT900 and the reduction in incentives would give us some cautious optimism that the pricing will hold up and we may have an opportunity, but it’s really too early to tell on that truck.
John Murphy – Bank of America-Merrill Lynch: Then, Dan, just on the pension on Slide 19, the 12.9 billion underfunding for the U.S. plan. Does that include a re-measurement for discount rates or any other actions?
Daniel Ammann – SVP and CFO: No, it does not.
John Murphy – Bank of America-Merrill Lynch: Just lastly, Dan Akerson, you talked about in your opening comments the Global Business Services Group and it sounds like a great idea and it sounds like it is at the early stages. I am just curious as you work through that process is that going to be more of a cost saving exercise or is that going to create more efficiency through the organization. I am just trying to understand really what the true aim of that is and what we can expect out of it?
Daniel F. Akerson – Chairman and CEO: I have seen this done when I was on the Board of American Express. We benchmarked off them, we benchmarked off at P&G and what you do is you consolidate your back office systems and try to get more efficiency and take cost out and it does have organizational implications.
John Murphy – Bank of America-Merrill Lynch: And the timeframe for that is there targets?
Daniel F. Akerson – Chairman and CEO: We just started in earnest. We are really in the early stages of it. But over the next year or two, we hope to take – well, I don’t want to give a number, but we have a strong ambition, strong targets to reduce our costs.
Adam Jonas – Morgan Stanley: Just a first question on GMIO. Can I ask kindly just give a bit more detail about where the execution issues are maybe between India or Australia or other factors? And also within that question has the change in the segment reporting shifted a little bit of profit out of GMIO and into GMIO from the GM Korea ops is that also been an impact here that you would like to quantify?
Daniel Ammann – SVP and CFO: So, let me address the second piece, then I’ll direct the first piece. The short answer to the second piece is, no. There is no impact on the year-over-year comparisons, because last year was – is represented on the same basis. Back to the first question there is really three aspects to this that I’d identify. One is there are couple markets that have underperformed from our volume point of view the overall markets. I think about the softness in India is an example, Russia to some extent. The second dynamic is more sort of Southeast Asia including Australia where we have a lot of competition from the Japanese manufacturers, who are sourcing to those markets; out of Japan, we are sourcing more, out of Korea. So, there has been a currency impact there. Then the third element more on the cost side as we have had a handful of warranty and recall items hit us in the second quarter. So, the way to think about this going forward is, we will continue to have some impact from all of those things probably rolling into Q3, but as we exit the year we do have some important launches ahead of us in the second quarter. We do hope that the warranty recall related items will fall away and obviously we’ll need to address whatever the competitive dynamic is in the market from a currency perspective as we go.
Adam Jonas – Morgan Stanley: So the warranty recall seems to more fall on execution and the others are more market conditions and competition. Can you quantify the warranty recall or is it a $100 million or $200 million order magnitude?
Daniel Ammann – SVP and CFO: I’d say it’s – more than half of the impact is market related and less than half is the warranty and other expense related.
Adam Jonas – Morgan Stanley: The question on North America. Would you describe big picture that the truck changeover year-on-year in the quarter was a net positive, negative or neutral when you factor in say benefits on pricing versus kind of the delta year-on-year with the changeover? I know that you’re also doing some changeover preproduction in deferred maintenance last year as well, was the balance of the truck isolating if you could, directionally?
Chuck Stevens – CFO, GM North America: From a financial perspective, net slightly negative in the quarter impact. There was $300 million of manufacturing preproduction and start-up. We only produced about 50,000 K2s, so I would say from that aspect slight negative. Overall, truck performance in the quarter quite positive from a share standpoint, our retail segment share, primarily on the strength of the GMT900 and retailers up 140 basis points year-to-date, so I would say that had a benefit and help from a pricing perspective as well on the GMT900.
Adam Jonas – Morgan Stanley: Last question, just on GM Financial credit losses. Would the credit losses still have improved year-on-year even excluding the IO addition?
Daniel Ammann – SVP and CFO: Yes, is the short answer to this.