Some GM shareholders restless

Annual meeting produces sparks

WILMINGTON, DEL. -- Their proposals all were voted down, but that didn't stop dissident General Motors shareholders from grilling Chairman Rick Wagoner over the automaker's declining market share and plans for the future at the annual meeting Tuesday.

Although Wagoner opened the 2 1/2-hour meeting with a speech touting progress the company has made in its turnaround plan and on advanced technology, several shareholders expressed dismay at the pace, saying GM was in a crisis and the board has not moved quickly enough to demand change.

"In my opinion, this company has turned around so many times we're going in circles. And that circle is leading us right down the drain," said shareholder James M. Dollinger of Flint, Mich.

Shareholder John Lauve of Holly, Mich., said time is running out for GM's comeback.

"The board has not demanded the necessary changes now," he said, pointing out that GM has lost 10 percentage points of market share in 10 years.

Wagoner told shareholders the company's North American turnaround strategy is working faster than expected with cost cuts and new products to boost revenue.

He said the company has made progress with the United Auto Workers in becoming more competitive, but more needs to be done in contract talks this summer.

GM, he said, needs to "further reduce our still unsustainable health-care bill, which was a staggering $4.8 billion in 2006."

Cuts since 2005

Since 2005, GM has cut $8 billion in annual costs, shed 34,000 hourly workers and rolled out about 20 new models in an effort to regain sales lost to Asian competitors.

Although it earned $62 million overall in the first quarter, the company still lost an adjusted $85 million on its North American operations. Last year it lost $2 billion, a vast improvement over a restated loss of $10.4 billion in 2005.

Wagoner said GM sees no more major announcements on plant closings or job cuts in the U.S. as it seeks to further cut costs.

But he said the company is "entertaining the possibility" of restructuring and selling its medium-duty truck business.

The company's priorities for 2007 include staying focused on the turnaround, driving growth in emerging markets such as China and pursuing advanced propulsion at a rapid pace, he said.

He announced that GM had awarded two lithium-ion battery development contracts to two companies for the Chevrolet Volt, a concept car that has a battery-powered electric motor that can run the car for up to 40 city miles on a single charge. Beyond that, a gasoline-powered, one-liter, three-cylinder engine can generate electricity to replenish the battery, giving the car a range of up to 640 miles. The battery system can be plugged into a home outlet for recharging.

After the meeting, Wagoner told reporters the company had targets for bringing the Volt to market, but he would not reveal them.

10 proposals vetoed

In all, 10 shareholder-backed proposals were voted down, including a bylaws change proposed by the Community of the Sisters of St. Dominic of Caldwell, N.J., that the company set goals to reduce greenhouse gas emissions and improve fuel efficiency.

Other nonbinding shareholder initiatives voted down were measures allowing shareholders with 10 percent or more of GM stock to call a special shareholders' meeting; creating a policy that 75 percent of future stock compensation given to senior executives be performance-based; and requiring executives to repay bonuses if the company later determines that they did not reach their performance goals.

Proponents of greenhouse gas reduction argued that GM needs to show investors that it is serious about curbing global warming and that it needs to produce more fuel-efficient vehicles to survive and stem its loss of market share.

"We believe that the company can be an innovator and that we can bring Americans the safe, comfortable vehicles that they seek, and meet greenhouse gas reduction targets," said Miranda Anderson, an adviser to Ceres, a group of investors and environmental groups that had backed the measure.

Just under 26 percent of the voters were in favor of the proposal, which GM said was unnecessary because it has been working diligently to reduce emissions and improve fuel economy.

GM shares fell 23 cents to $30.14.