G. Richard Wagoner, Jr. President and Chief Executive Officer, GM Corporation
Michael J. Burns President, GM Europe
David N. Reilly President and Chief Executive Officer, GM Daewoo Auto & Technology Co. and Vice President, GM Corporation
Robert A. Lutz Vice Chairman, Product Development, GM Corporation and Chairman, GM North America
Carl-Peter Forster Chairman and Managing Director, Adam Opel AG and Vice President, GM Europe
and Group Vice President, GM Corporation
Peter Augustsson Chairman and Chief Executive Officer, Saab Automobile AB and Vice President, GM Europe
March 4, 2003
RICK WAGONER:
* It's always a pleasure to be back in Switzerland at the Geneva Show.
* And, this year, it's great to see that our GM stand integrates the whole family of GM brands sold in Europe, and highlights the depth and breadth of the products we offer customers here.
* At GM, we ended 2002 on a positive note:
earnings and cash flow are well in excess of expectations;
we increased our share in 3 out of 4 regions for the second consecutive year;
we improved our footprint in key growth markets like China, Korea, and Russia;
and, we continued our quality and productivity gains.
* All of this gives us confidence in the strength of our fundamental operating systems, which provide a great foundation upon which we will build for the future.
* But, while it is critical that we get these fundamentals right, our ultimate success will be primarily determined by our product.
* With that fact in mind, we introduced several strong new products around the globe over the last year, such as the
Cadillac CTS
Hummer H2
Saab 9-3 Sport Sedan
Chevy Meriva in Brazil
Holden Monaro in AP
and here in Europe, the Opel/Vauxhall Vectra.
* We also showed our future product direction in North America with several new models and concepts earlier this year at the Detroit Auto Show.
* And I assure you that we're equally enthusiastic about our products here in Europe.
* At this time, I'd like to ask the executives who are leading this GM product initiative to come and help me cover some of the news we want to share with you today...
Bob Lutz, our Vice Chairman of Product Development and Chairman of GM North America
Mike Burns, President of GM Europe
Peter Augustsson, from Saab
Carl-Peter Forster, from Opel
And from our newest family member, GM Daewoo Auto & Technology Co., Nick Reilly
*
At GM, we're continuing our global product offensive this year.
* In terms of product introductions, we're following up a strong 2002 with an even stronger 2003, with more than 30 new-vehicle or major-variant world premieres around the globe.
* And actually, the market impact is considerably more than that when you take into account all the significant product enhancements, new engine and transmission features, and new technologies being introduced - greatly improving, for example, our diesel engine offerings here in Europe in '03 and '04.
* These products are great examples of how we're moving with a sense of urgency and a focus on innovation at GM.
* That innovation is critical as we address the important environmental issues that our industry is facing.
* In January, we announced a strategy to bridge the gap between improved internal-combustion engines and fuel cells, with a major commitment to hybrid vehicles in North America.
* We will offer customers three different hybrid propulsion systems, on three vehicle architectures, representing more than a dozen of our most popular models.
* If consumers were to select the hybrid option on all the models included in our multi-year plan, we would be capable of providing more than one million hybrid vehicles per year.
* Here in Europe, of course, diesels play a critical role in improving our fuel-economy and environmental performance - and our commitment to their development in Europe is no less than our commitment to hybrids in North America.
* In fact, we'll introduce four diesel offerings in Europe this year alone - Carl-Peter will tell you more about that in a moment.
* The result will be a significant increase in the breadth and sophistication of our diesel engines in Europe.
* We think these measures are an important interim step on the path toward a future hydrogen-based economy
* And, at the Paris Auto Show last fall, GM showed our vision for a hydrogen-based fuel-cell future with our Hy-wire concept vehicle, which is on the stand here in Geneva.
* Hy-wire is the world's first vehicle to combine fuel-cell and by-wire technologies - another example of GM's commitment to using technology to address environmental and energy challenges, while providing products that customers really want to buy.
* With both our hybrid and fuel-cell advances, we're creating a range of capabilities and options that our GM brands around the world can use in developing their future portfolios.
* Let me ask Bob Lutz to give us a very brief overview of our product development direction across the GM network.
BOB LUTZ:
* Thanks, Rick. It's great to be here.
* It's important to remember that worldwide sharing does not mean world vehicles.
* It means tailoring specific vehicles for specific regional and local markets with maximum common components and processes.
* The Epsilon architecture is a good example - its breadth is showcased in Geneva with the Signum and the 9-3 convertible and with the Malibu launch in the U.S.
* GM's architecture strategy allows us to knit together all of our worldwide product development functions to better share ideas, practices, parts and even whole vehicles.
* We're not changing product development centers or their roles, just having them share more, communicate more and consider other regional and brand needs when developing product.
* In terms of people and product, GM has more resources than any other automaker in the world.
* Leveraging these gives us a significant advantage, both in terms of cost savings and in terms of quickly bringing the right products to the right market.
* A great example is the Meriva, developed for Europe and Latin America.
* The Holden Monaro, adapted for North America as the Pontiac GTO, is another great example.
* We are increasingly sharing across product lines, regions and all of our operations. And the benefits will be maximized, both individually for the regions and brands and collectively for GM worldwide.
* Now, to talk more about what we're doing in Europe specifically, I'd like Mike Burns to take over.
MIKE BURNS:
* Thanks, Bob.
* In Europe, we're further increasing our focus on great new products and continuing with our largest-ever product offensive - and we're starting to see results in the marketplace.
* The new 9-3 Sport Sedan is off to a strong start, receiving significant recognition here in Europe and in North America.
* The Vectra sedan and hatch models launched last year are also great examples. When compared to their competitors in the same body styles, they are clearly leading within their segment across Europe.
* Those are the kinds of results that let you know you're on the right path - it is early, but we feel we're off to a strong start this year and we have several important new products hitting the road: br>
* The new Saab 9-3 convertible reaffirms Saab's leadership in premium open-tops with great style and some truly impressive features.
* There will be several new models and powertrain offerings from Opel/Vauxhall as well, including the Signum and Meriva, which both represent new, highly innovative, segment-defining vehicles.
* We see the potential for conquest sales being very high with these new vehicles.
* And with additional new products, like the Nubira, from GM Daewoo, hitting the European market this year, we see even further potential for growth.
* On the operational side of things, last year we achieved significant cost reductions.
* We continue to transform our manufacturing plants into flexible, lean operations by implementing the GM Global Manufacturing System.
* As a result of this and many other initiatives, we have achieved substantial efficiency gains and quality improvements that have made a real difference.
* We have increasingly integrated our processes across Europe, and will continue to pursue this strategy in new areas, such as engineering.
* With these measures and the great new products we're bringing to market, we have begun to develop some sales momentum.
* In five of the last six months, GME has achieved year-over-year share increases and we continue to build on this momentum as we drive for break-even results this year.
* 2003 started on a strong note with year-over-year sales increases in Germany and across the European market in total. Despite the overall European industry being down over 5.5 percent, GME sales climbed over 4 percent in January versus 2002 and preliminary February results indicate another solid month for us.
* These are good indications that our turnaround efforts are succeeding and we will continue to aggressively drive this trend.
RICK WAGONER:
* Thanks, Mike, for that overview of GM Europe activities.
* An important part of our strategy in Europe is Saab.
* Peter - can you update us on Saab?
PETER AUGUSTSSON:
* It's clear that with the successful launch of the 9-3 Sport Sedan last year, to be followed closely by the new Aero and convertible versions, that we are well on the way with our biggest new product offensive in our history.
* The new 9-3 convertible that is making its world debut here today, brings a stylish, open-top dimension to the new 9-3 range.
* This car is a key part of Saab's product offer, representing some 25 percent of our total sales.
* Saab is launching this convertible from a position of strength - we are the established market leader in this segment.
* In fact, four out of every ten premium soft-tops sold are Saabs.
* With this new car, we have developed a premium convertible with a level of structural integrity, build quality and running refinement that positions it at the very top of its class.
* Its soft-top tonneau mechanism is hydraulically powered. A unique two-step cycle allows it to deploy fully in just 20 seconds, making it comfortably the fastest in its class.
* As you would expect it from Saab, there are several innovative features like:
the innovative CargoWing accessory rear spoiler, which folds out to carry skis or a snowboard,
and the CargoSET (Self-Expanding Trunk), which automatically increases the capacity of the trunk when the roof is raised.
* In addition to its functional qualities and distinctive Scandinavian design, our new convertible offers a greatly improved driving appeal with the widely acclaimed chassis dynamics of the 9-3 Sport Sedan.
* This new model is well placed to re-affirm Saab's leading role in the premium convertible segment.
* Without doubt, this is the biggest advance Saab has made in 20 years of designing four-seat, four-season soft-tops.
* While we are progressing with our product offensive, we are also engaged in fundamentally changing Saab's business processes to reduce costs and grow our revenue base.
* We are coming to fully appreciate what being a member of the broader GM global family can offer us as we explore new - and importantly, quick to market - product opportunities by working with GM and its alliance partners.
* There is much ahead and we are confident that we will make rapid and substantial progress.
RICK WAGONER:
* Thanks, Peter.
* You touch on an important point - one Bob talked about also - which is that GM has a broad network of product development centers in all major regions of the world.
* That's a unique advantage for us and you'll see us leveraging that network on an increasing basis as we go forward.
* Carl-Peter - what's new at Opel?
CARL-PETER FORSTER:
* I'm happy to say that a new Opel is starting to emerge.
* Our aggressive plan is positioning Opel with one of the freshest and most innovative product line-ups on the market.
* We are making real strides in all areas - and of particular note with our quality.
* This is really starting to pay off. Our customers and dealers have recognized it and this is helping us to buck the general weak trend so far this year in the European market.
* We have a full slate of new models again this year, including the Signum, which makes its world debut here at the Geneva Show and will arrive in showrooms a couple of months from now.
* Representing the third unique body style in the Vectra line-up, following the sedan and GTS models, the Signum is a combination of stylish appearance, great driving dynamics and impressive individual passenger comfort coupled with interior flexibility.
* With its stretched body design, its flexible rear-seat arrangement, exceptional equipment package and new technologies, the Signum breaks through conventional segment barriers and opens an entirely new market - the Signum Class.
* Another key product for us this year is the new Meriva - a smart five-seater featuring the unique FlexSpace seating system - which will go on sale beginning in May.
* Opel/Vauxhall is ushering in a new dimension in the compact class with the new Meriva. Like its big brother, the Zafira, the Meriva uses its innovative seating system to set a new benchmark in interior versatility.
* Both the Signum and Meriva are symbols of the shift in the Opel/Vauxhall product portfolio, which, in future, will consist of 40 percent conventional body styles, 40 percent innovative body styles and 20 percent niche models.
* And speaking of niche models, the Speedster Turbo is one that will certainly spice up the driving experience.
* With a top speed of more than 240 km/h, the Speedster Turbo's powerful 2.0 ECOTEC turbo engine delivers super-car performance - going from zero to 100 km/h in only 4.9 seconds.
* And there is still a lot more to come this year.
* The Vectra wagon, the 4th variant of our new Vectra family, arrives later this year. As well, enhancements for the Corsa and the Movano will help boost the already strong volumes we enjoy with these products.
* Also very important for us this year is the addition of several new and enhanced powertrains.
* In particular, we will offer four new, state-of-the-art common-rail diesel engines with up to 177 horsepower.
* In a few weeks, we'll be launching the Astra 1.7 CDTI with a common-rail diesel that already meets the stringent Euro 4 emissions standard.
* It does this without a diesel particulate filter, too, which can't be said of any filter-equipped diesels currently on the market, which only meet the Euro 3 standard.
* We will also have additional transmission offers, including a new six-speed gearbox and our Easytronic automated manual transmission.
* But, this certainly does not mark the end of our aggressive product plans. On our stand today, you can see our Opel GTC Genève concept car, which offers a further indication of our design direction for the compact segment.
* In 2004, watch for more, including the all-new Astra and a new coupe roadster.
* I'm pleased to say we look forward to Opel's future with a lot of confidence.
RICK WAGONER:
* Thanks, Carl-Peter.
* I think Opel and Vauxhall are beginning to turn the corner here in Europe.
* Adding to our growth in Europe will be a new brand in the GM family, one that will strengthen our position on the value end of the product spectrum.
* Nick, would you give us an update from GM Daewoo?
NICK REILLY:
* We have covered a lot of ground in a very short time.
* Immediately after its establishment, GM Daewoo started a major product offensive, extending the product line with new models and an expanded engine range.
* Since then, domestic sales have been up 5.4 percent. The Matiz is number one in its segment in Korea and sales of our entry in the mid-size segment were up 41 percent from December to January.
* The team in Europe is establishing and strengthening a distribution network to support and grow the business here.
* In September last year, the all-new Daewoo Kalos was successfully launched here in Europe, followed closely by the all-new Evanda.
* In addition, European customers now have a broader range of engines to choose from in the Kalos and Matiz models.
* So, a lot has happened quickly and there is more to come.
* In fact, the Geneva Show represents the European premiere of our latest mid-size model, the Nubira.
* Typical for Daewoo, it features attractive styling, sophisticated engineering, great reliability and exceptional value.
* The styling comes from Pininfarina and I would like to thank the team there for their great contribution.
* I am convinced that our customers will be impressed by the value for money the Nubira - like all GM Daewoo products - represents.
* We also have a new concept vehicle on our stand, the Scope, which signals how important it is to us to add an SUV to our line-up. We will be moving fast to make this happen.
* GM Daewoo has a lot to offer. Here in Europe, as is the case around the world, we think our prospects are very solid.
RICK WAGONER:
* Thanks, Nick.
* At GM, we're pleased with how this alliance has come together.
* In fact, I visited South Korea last month and was very pleased with with the progress I saw at this early date.
* There is one more piece of the GM picture we'd like to talk about today, and that's Cadillac.
* Bob, what's Cadillac's latest news?
BOB LUTZ:
* A few short years ago, GM committed to a bold product direction for Cadillac.
* It was decided that our luxury brand would return to its original vision by developing vehicles with a unique blend of bold, trend-setting design and leading-edge technology... and this approach is already gathering momentum.
* What's fuelling that momentum is product.
* Among other objectives, Cadillac is targeting growth segments. The CTS, which got off to a great start in North America last year, was a big step in that direction.
* With its nothing-else-like-it design and its exhilarating sport-sedan performance, it's a real example of a must-have vehicle. And the bar will soon be raised with a 400-horsepower, high-performance "V-series" for North America.
* The CTS will go on sale here in Europe next month.
* But the CTS is just the first step of a much bigger plan. The bold new era of Cadillac continues with the 2004 XLR.
* A two-seat, retractable-hardtop convertible with a head-turning design, the XLR's mission is to deliver exhilarating style and performance to the luxury roadster class.
* With a host of innovative features, the XLR will also include the first application of a high output 4.6L Northstar V-8 engine in a rear-wheel-drive configuration and was developed on the next generation of GM's acclaimed performance car architecture, designed specifically for convertibles.
* To emphasize Cadillac's ambition, we have created a very special vehicle - a super-luxury, aspirational Cadillac V16.
* The Sixteen is both a reminder of a glorious past and a progressive statement: Striking design... heroic proportions... remarkable technology...and craftsmanship... a vision of the golden age of Cadillac to come.
* The Cadillac Sixteen's 32-valve V-16 concept engine displaces 13.6 liters, is mated to a four-speed electronically controlled automatic transmission and produces 1000 horsepower and 1000 lbs.-ft. of torque.
* It features fuel-saving Displacement on Demand technology, which shuts down half of the cylinders during most driving conditions and automatically and seamlessly reactivates them for more demanding conditions.
* The V-16 engine is as fuel-efficient as comparable V-10 and V-12 competitive engines. It has class-leading output, lower engine weight than current big-block V-8s and it runs on regular unleaded fuel.
* This vehicle communicates our vision for Cadillac to move further up-market... to become ever more aspirational... and to return to pre-eminence in the luxury market.
* I hope you'll take a closer look at this great concept on the GM stand.
RICK WAGONER:
* Thanks, Bob.
* Thanks, Mike... Peter... Carl-Peter... Nick.
* I hope that we've given you a sense of the energy that exists these days across General Motors.
* We know there are plenty of challenges that we are facing - some industry, some GM-specific - but we've been focused on the fundamentals of quality, cost, and product, and we like the road we're on.
* That wraps up our piece of this conference, so let me thank you once again for joining us and let's open it up for questions.
