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Thu, Jun 08, 2006 - Page 10 News List

GM boss says Japan weakening yen

UNFAIR COMPETITION?Rick Wagoner told shareholders that Ford and Chrysler also believe the pricing mechanism in Japan is not being handled on a free-market basis

AFP , WILMINGTON, DELAWARE

Rick Wagoner, chairman and chief executive officer of General Motors Corp, addresses the company's 98th annual stockholders meeting at the Hotel du Pont in Wilmington, Delaware, on Tuesday.

PHOTO: AFP

The chairman and chief executive officer of General Motors Corp (GM), Rick Wagoner, accused the Japanese government on Tuesday of artificially weakening its currency to blunt competition from US auto-makers.

Talking to shareholders at GM's annual meeting in Wilmington, Wagoner said that Japan's carmakers were "formidable competitors."

However, the GM chief said that when delegates at a recent G7 meeting endorsed free trading in currency markets, the yen began to strengthen.

Wagoner said that a representative of the Bank of Japan appeared to contradict that sentiment after the meeting, causing the yen to weaken.

"We were not pleased," Wagoner said, claiming that the Ford Motor Co and DaimlerChrysler AG's Chrysler Group also shared GM's belief on the Japanese currency.

"The most important thing in competition ... [the] pricing mechanism, is not being handled on a free market basis by the second-largest economy in the world," Wagoner said.

The GM chief spoke after last month's sales figures showed the so-called Big Three US automakers suffering sales declines in contrast to Japanese rivals like Toyota and Honda who posted robust sales gains.

Some shareholders at the meeting asked Wagoner if a merger with Toyota was on the horizon.

"We have no plan, we haven't talked to anyone and I suspect it will not happen," Wagoner told shareholders packed into the Hotel du Pont.

Wagoner also responded to shareholders' concerns about GM's restructuring program following the company's US$10.6 billion loss last year.

"We've made some big moves, and we've made a lot of progress," he said, while urging shareholders to remain patient in the months ahead.

"Our goal is not just to fix GM for today, but to structure GM for sustained profitability and growth," Wagoner said.

His upbeat comments met with occasional polite applause from the assembled shareholders.

Wagoner said he was optimistic that GM would work out a deal with Delphi Corp. that would avoid a crippling strike at its largest parts subsidiary despite a disagreement over union contracts.

GM is in the midst of offering early retirement and buyouts to 113,000 blue-collar workers. Union members have until the end of this month to accept the buyout and more than 20,000 United Auto Workers members have already accepted the buyouts, according to union officials.

Analysts have said that the high acceptance rate will help speed up the implementation of GM's restructuring plan.

GM posted a 16 percent sales decline last month from a year ago of 345,157 units. Passenger car demand was lower by 19 percent at 129,905 units, while truck sales were off by 13 percent to 215,252 units.

In contrast, Toyota Motor Sales USA Inc reported its overall best-ever monthly sales of 235,708 vehicles last month, an increase of 12.3 percent over May last year.

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