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Ok, I’ve gone on a lot about the Asbury and Group 1 presentations, and General Motor's (GM) presentation lasted some 2+ hours. So I’ll just give you the quick summary. GM’s CEO Rick Wagoner laid out the company’s top 5 priorities:

1) Execute the turnaround (on target for $9 billion in annual cost savings) and structural costs ~29% to 30% of revenues, ahead of target of 31%. Also, continue to invest in growth, with 40% of 2007 volumes are to come from launch products.

2) Drive growth profitably in emerging markets (55% of volumes already come from outside U.S., and that figure will continue to grow.)

3) Continue to drive the benefits of running the business globally. Mr. Wagoner said this is probably one of the most profound changes at GM as they become one global product development, design driven company. Bob Lutz, the company’s Vice Chairman spent a lot of time emphasizing the transition that has taken place at the company from an amalgamation of four different companies, while today they have centralized product functions, with global design and global engineering.

4) Energy diversity and environmental leadership. And he talked about how the company has 2 million E85 vehicles on the road, and they plan to grow even more. Also with electric vehicles the company continues to make progress announcing the company’s advanced lithium ion batteries (still some work needed,) E-flex, and the Chevy Volt concept based on E-flex.

5.) Continue to improve business results. No one believes break-even at corporate is winning.

A couple noteworthy comments also. Mark LaNeve, when talking about GM North America, said that they need to make their production schedules more flexible to be able to match supply with demand. So they need to work with the unions so that they have work agreements that “support such flexibility.”

I give Rick Wagoner some props for his answer about the jobs bank issue in the upcoming union negotiations. He said: “I don’t want to box myself in saying it has to go. But I will tell you this, we want all of our people being productively employed. That’s the right thing for us.” I think that is the right thing for any business and I hope the union leaders seriously listen to Mr. Wagoner’s comments.

Regarding dealer consolidation. Mr. Wagoner said 67% of the Buick, Pontiac, and GMC products sold went through a combined channel. So they have made steady progress over the last 18 months, and they think they are at the cusp of where it is gaining momentum at the dealership level.

One really good question that came up, however, where I didn’t like the answer was why the company’s capital expenditures are increasing by about a billion and a half to around $8.5 to $9 billion? With 40% of the company’s products being launch products (obviously now moving past a heavy launch year) and fewer plants, it does not seem to make sense that cap-x is going up so much.

Management pointed to a fair amount of powertrain spending, investments in Asia, and even some new plants in Russia and Mexico. But, what it also sounds like it comes down to is that after a big product launch, they aren’t able to rest, as Mr. Wagoner said they need to “shorten the life cycle.” The automakers are not in the index, so I don’t focus on their investment merits, but I should point out one obvious thought I had as Mr. Wagoner was answering the question in this way was that if this shortened life cycle is always going to require higher capital expenditures, how do you generate a return on your investment? It almost seems like you are constantly spending more and more money to reach a higher break even point?

I can only hope that a lot of the synergies from becoming a single global product company enable them to become more flexible with their design and development in the future so higher cap-x is not what is always needed to address the ever shortening life cycle of vehicles.

GM 1-yr chart:

GM 1-yr chart

Source: Wagoner Lays Outs GM's Top Five Priorities