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GM turnaround too slow, some shareholders say

General Motors shareholder Evelyn V. Davis, front right, says a few words to GM Chairman Rick Wagoner during the 2007 Annual Meeting of Shareholders at the Hotel du Pont in Wilmington, Del., on Tuesday. (Associated Press / The Spokesman-Review)
Associated Press The Spokesman-Review
General Motors shareholder Evelyn V. Davis, front right, says a few words to GM Chairman Rick Wagoner during the 2007 Annual Meeting of Shareholders at the Hotel du Pont in Wilmington, Del., on Tuesday. (Associated Press / The Spokesman-Review)

WILMINGTON, Del. — Their proposals all were voted down, but that didn’t stop dissident General Motors Corp. 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.

Shareholder John Lauve of Holly 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 the past 10 years.

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

He said the company has made progress with the United Auto Workers in becoming more competitive, but more needs to be done in national 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.”

Since 2005, GM has cut $8 billion in annual costs, shed more than 34,000 hourly workers and rolled out more than 20 new models since November 2005 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 closures 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 top 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 told about 100 people in attendance.

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. He said they were moving as fast as possible on the car, but were not obsessed by any timeline.

“It’s more can we keep our feet in front of us running every day,” he said.