After a tumultuous year in which it announced thousands of job cuts, lost billions of dollars and cut its dividend in half, General Motors Corp executives will face shareholders at its annual meeting in Delaware, including some investors calling for their ouster.
One shareholder is pushing a proposal at Tuesday's meeting that would require the company to give back executives' bonuses if they don't achieve performance targets, while another has nominated a slate of candidates to replace the board of directors.
"A lot of us are just beside ourselves with frustration about the downfall of our company," said John Lauve, a GM retiree and shareholder who wants to see the board replaced. "They have the wrong people on the Titanic. They've hit the iceberg and it's sinking."
But others suspect shareholders will be mollified by GM's aggressive efforts to raise cash and streamline operations, including the sale of a majority share in its finance arm, General Motors Acceptance Corp, the sale of stakes in Suzuki Motor Corp and Isuzu Motors Ltd, an agreement with the United Auto Workers to cut retiree health care expenses, and a buyout offer to GM's 113,000 US hourly workers.
"I guess my general sense is that they're pulling the right levers, and what we've seen so far is very encouraging, but they have a lot left to do," said Pete Hastings, an analyst with the investment company Morgan Keegan & Co.
At last year's annual meeting, also held in Wilmington, Delaware, GM's chairman and chief executive, Rick Wagoner, laid out a plan to cut 25,000 jobs and close an unspecified number of plants by 2008. As the automaker's losses mounted later in the year, GM increased the number of cuts to 30,000 and named 12 plants it plans to close by 2008.
GM earned US$445 million in the first quarter of this year compared with a loss of US$1.3 billion in the January-March period a year ago. It was the first quarterly profit since 2004 for GM, which lost US$10.6 billion last year.
But GM continues to face some significant hurdles. The company is in talks with its former parts division, Delphi Corp, and the UAW on a deal to lower wages at the supplier, which has filed for bankruptcy protection. Delphi is seeking a judge's approval to cancel its labor contracts, a move that could provoke a strike and devastate GM, its largest customer.
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