State of the Union June 30, 2010

From the Detroit News:
A parade of General Motors Co. executives put the hard sell on bankers and financial analysts Tuesday, promising they'll continue to make money, as the company heads toward its initial public stock sale. Analysts left the meeting encouraged that GM has a clear product plan targeting growth in emerging markets, and financial discipline after years of mismanagement. And they were optimistic that the initial public offering, perhaps this fall, will be successful. "This will be a hot deal," said Maryann Keller, an auto analyst and head of Maryann Keller & Associates in Stamford, Conn (as well as frequent GM critic). While GM shed billions in debt and obligations through bankruptcy, the automaker is carrying $42.2 billion in debt and pension obligations. GM CFO Chris Liddell's goal is to boost GM's $30 billion in cash, fully fund its pension obligations, and slash remaining debt. GM's pension plans cover about 650,000 people and are underfunded by $13.6 billion, according to a government report. "Every spare dollar will be put toward that use over the next few years," Liddell said. Among the automaker's other selling points to analysts and potential investors:
o It has slashed the amount of cash incentives on each vehiclesince last year from almost $4,700 to $3,230.

o The U.S. market share of Chevrolet, Buick, GMC and Cadillac has risen from 15.4 percent in the first quarter of 2009 to 19.2 percent this spring.
o GM's average transaction prices have climbed $3,300 from a year ago, more than double the industry average.

o Through May, sales of GM's four core brands were up 31 percent, a jump of almost 207,000 vehicles from a year earlier, which is nearly double the volume lost by shedding Hummer, Saturn, Saab and Pontiac.

But GM cautioned against counting on steady gains, given increased competition, a fragmenting auto industry and volatility in financial markets and the global economy. "The message we all need to understand is the next 10 years will be tougher than the last 10," Vice Chairman Steve Girsky said. "And the last 10 were pretty tough."