Adam Jonas of Morgan Stanley
Q: Looking at pensions, the company mentioned that it took advantage of some of the pension relief for the U.S. plan. How does this change your funding strategy in the near term, given that the company is expected to contribute on order of $5 billion or more of cash in future quarters.
How has this changed given the pension relief?
Daniel Ammann, GM’s SVP and CFO responded: The pension relief takes acquired contributions from being a long way out to a really, really long way out and therefore doesn’t change our fundamental strategy. We see it as an opportunity to take advantage of and looking more generally at pensions. We continue with our strategy on the de-risking side of the plan. We have been moving into this direction since last year and this strategy has benefits during these turbulent market times.
Himanshu Patel – JPMorgan
Q: Can you tell us what’s happening in Europe? Your report signaled guidance caution and cost containment. Has there been an off the cliff event in Europe or this more of a macro issue? In addition, the company provided a year over year Europe walk that talked about flat pricing.
Can you talk about pricing sequentially in Europe?
Ammann responded: There is a lot of uncertainty in Europe. Whether there’s a cliff event or not, we have the same crystal ball.
If you look at the first three quarters of this year as compared to the first three quarters of last year in Europe, we’ve improved about $1.3 billion year-over-year in EBIT or $700 million improvement excluding restructuring. This is a significant year-over-year improvement and we know how to make progress. We have to factor in cost elements, market elements and product elements; we’re still continuing to work on these. However, we’re don’t expect to get bailed out by a big ramp-up in volumes in Europe, and we’re focused on the actions we need to take to get the breakeven point down so we can be sustainably profitable even in a challenging environment.
Christopher Ceraso – Credit Suisse
Q: There was an important management change in Europe. Is this signaling a significant change in direction or are there big things that you can do in that business to meaningfully change performance or are you subject to the market?
Daniel F. Akerson – Chairman and CEO responded: No, I don’t think there is a significant change here. We moved Karl Stracke over there last spring and he’s been running Opels now for the better part of 2011. Nick Reilly has been with the company 37 years but he will step down next March but effective at the end of this year, he’ll step down from his Europe responsibilities.
I don’t see any significant change there.
General Motors Corporation (NYSE:GM) shares recently traded at $22.31, down $2.73, or 10.9%. Its market capitalization is $34.84 billion. They have traded in a 52-week range of $19.05 to $39.48. Volume today was 32,876,325 shares versus a 3-month average volume of 14,351,600 shares. The company’s trailing P/E is 4.70, while trailing earnings are $4.75 per share. Get the most recent company news and stock data here >>