Good morning. Thanks for being here. So welcome to the 2020 General Motors Capital Markets Day. Our press release, presentation and earnings material are available on the GM Investor Relations website. We’re also broadcasting today’s event via webcast. Before we begin, I need to take care of a couple of housekeeping items.

First, safety is a top priority for us at GM so please take a moment to look at the two exit doors so in the unlikely event of an emergency, you can access them quickly.Second, note our forward-looking statements. All the discussion today, including the Q&A, will be governed by this language. It’s going to be an exciting day so let’s get started..

Well, welcome, everybody. I’m really excited to have this opportunity to share General Motors’ story today. The video you just saw captures our energy, our passion and our confidence as we transform the company and create a world with zero crashes, zero emissions and zero congestion. This vision drives every team member every day.

And we are really enthusiastic about the opportunity we have created to refine the future, redefine the future of personal transportation and all the possibilities that come with it.Here’s a brief overview of what we’ll cover today. Mark will start and provide an update on the reinvention of the Global Product Development organization.

He will also showcase some of our dramatic new launches, including Cadillac and the Escalade that was revealed last evening, and he’ll give us a preview of our electric vehicle strategy.Barry will cover our truck and full-sized SUV franchise and our 2020 launches as we’re very excited to launch at the full-size SUVs from Chevrolet from GMC and from Cadillac.

And Matt, President of our China operation, will cover his update and perspectives on the continuing and evolving macroeconomic situation in China as well as the measures General Motors China is taking to address them and the strong foundation we have and intend to build on because we see a long-term opportunity in China.Now Matt arrived in the States late last week and out of an abundance of caution, he will actually – we have taped his remarks and we will show those to you and he will dial-in for the actual Q&A session.

Steve Kiefer, who newly took over our GMI region, will talk about our team’s plan to improve performance in our GM international markets and give an update on the early days launch of our global family of vehicles product, the GEM product we’ve talked about.And then Dan Ammann is here, CEO of Cruise, and he’s going to provide an update on Cruise.

He’ll talk a little about the news that we shared earlier this month with our – or actually, last month, with the Cruise Origin, and then also provide a framework for how we’re thinking about commercialization and how that translates into revenue and profitability.We’ll then take a break for lunch, and Dhivya will come up and she’s going to review the progress toward our key financial metrics.

She’ll review 2019 performance and she’ll also provide an outlook for 2020.

She’s also going to share and really hope you see – provide a unique – the unique positioning that General Motors has with our cash-generating franchises and also our accretive growth opportunities, especially in EV but in other areas as well.And because our fourth quarter earnings were announced today and we have our Capital Markets Day today, we will have one Q&A session and address all your questions there.

Our goal today is to leave you with a clear understanding of our vision and our strategy for the future and how we’re operating the business.

And we hope that you believe, as we do, that General Motors is uniquely positioned with all the elements to take the industry forward.Now let me pause before we go into the content of Capital Markets Day and talk about the coronavirus.

Our thoughts and our focus has been on our people and then on the business, and our thoughts go out to everyone who has been impacted by the virus. We are working closely with SAIC, our joint venture partner, as the situation is very fluid.

We’re focused on the health and safety of our employees, and we are taking all necessary steps to make sure they have full support and urgent access to any medical support they may need.Our supply chain and engineering teams are working around the clock to develop and execute contingency plans, and we are doing everything possible to mitigate the impact of the virus.

Again, it’s a very fluid situation. As we learn more, we will provide updates.

So now if we move back to the Capital Markets Day, let’s go back to last year’s Capital Markets Day.There, we had recently made announcements for – and shared the major business transformation in November of the year prior, a transformation that was designed to strengthen our business.

The cost savings from that transformation helped us mitigate the effects in 2019 of an increasingly volatile global business environment, including reduced volumes in two of our – our two largest markets, China and the United States, as well as the work stoppage in the United States.The team has been working hard to restore lost production while ensuring our inventory is aligned to market demand, and Dhivya will speak on how we continue to not only realize the savings from the transformation but also how we’re looking at production and the ability to recover.

In addition, as part of our transformation though, we were working to realign the workforce and our resources with our strategic priorities for the future.We have streamlined our vehicle portfolio to recognize customers’ overwhelming preference for SUVs, for trucks and for crossovers.

We are also investing heavily in the technology and innovation that will help us realize our vision. I truly believe that 2020 is the year when all of our work comes together and we move forward with integrated solutions that will be the groundwork for reinventing how we deliver mobility to our customers.

There are – there’s ample evidence today that our customers are increasingly buying products and services from companies and brands they identify as improving their lives and improving the sustainability of the planet.

They want companies to integrate environmental stewardship and sustainability into every aspect of the business.And it’s a business imperative because it’s a priority for our customers. It’s also a priority for our employees, and it’s a priority for you, many of our investors and we believe the right thing to do.

As we compete for the best talent, our employees or our prospective employees are telling us, they want to work for a company that does the right thing, that shares their values and supports their desire to make the world a better place, all of that in addition to making sure that it’s a rewarding career opportunity and there’s growth potential.Now our belief in the science of climate change drives our commitment to create a zero emissions future.

So while you’ll hear a lot today about our vision and the progress we are making to achieve it, we know we have more work to do today to reduce the environmental impact of our operations and of our products.

There is excellent work going on across the company, and we are integrating and accelerating that work because we believe it’s critical to the future, and we believe we have a responsibility to aggressively pursue it.So we are establishing a new set of key goals, and today, we are publicly committing to meet even more ambitious targets as we move forward.

We will source 100% of our global electricity from renewables by 2040. This is a full decade ahead of the commitment we had previously made.

Now we finished 2019 with 23 sites completely powered by renewable energy.By the end of 2021, we’ll grow that to more than 28 sites, including our Global Tech Center and the Renaissance Center where our headquarters is at. By 2030, we – all of our U.S.

facilities will be 100% powered by renewable energy, and by 2025, we expect 60% – to be 60% of the way toward our 100% goal from a global perspective. And while the issue of doing – what to do with end-of-life batteries is a subject of much debate and concern, GM has been very proactive on this front.

GM already enables 100% reuse or recycling of our batteries, and we will continue to engineer our EV batteries for full reuse or recyclability, and we believe they have long-term value and therefore are an asset.In partnership with our suppliers, we will also increase the percentage of automotive parts with sustainable material content.

We’ve established sustainable material target of at least 50% by 2030 for all of our vehicles. And by mass, we already enabled more than 85% reuse or recycling of our current vehicles at the end of their life.

And by increasing the sustainable content, we think we’ll get even closer to achieving a circular economy.To accomplish these goals and develop a more aligned and holistic plan, we have recently named Dane Parker to be our Chief Sustainability Officer and to lead our sustainability office.

And this is a team that will work cross-functionally to one, ensure responsible consumption and production of materials; to lead the strategic design and implementation of our EV infrastructure; and also engage internal and external stakeholders to achieve our vision of a zero emission future.We’ll continue to advocate for policies that are aligned with our vision.

Because we believe climate change is real, it’s a global concern and the best way to remove automotive ambitions from the environmental equation is an all-electric zero emissions future, and it needs to be done on a national level and then a global level.

We believe that the National Zero Emissions Vehicle program that we have proposed across all 50 states will help accelerate the transition to EVs and all of the benefits that come to the environment and to society.It would also position the United States as a leader in electrification.

It would create economic growth and make EVs more affordable for more customers more quickly. If we want true electrification across the country, which we do, we need the infrastructure, the education and the incentive programs to all align and work together.

We strongly believe that focusing on interim technologies such as hybrids and multiple solutions for multiple states actually slows the adoption of full battery electric vehicles.Now my commitment and General Motors’ commitment has always been that we’re going to do the right thing even when it’s hard, and I am more convinced than ever that we need one national standard on which all parties can respectfully agree and that will benefit all.

We’ve really frankly got to get past the politics and do what’s right because we’re talking about a fundamental shift in transportation as we know it.Now General Motors will continue to have conversations with both California and the federal government so we can speed EV adoption and be ready for customers with the electric vehicles they’re looking for, whether it’s a Chevrolet Bolt EV or a GMC HUMMER EV or frankly, anything in between.

By taking these steps and pushing for real dialogue to resolve the underlying issues, we believe we can accelerate EV adoption and lessen the impact of our operations.But as we look today and as customers continue to choose crossovers, SUVs and trucks, we are also working to ensure these vehicles are as efficient as possible, using 3D printing, parts consolidation, improving aerodynamics and the use of lighter materials.

For example, we have removed an average of 350 pounds from each architecture for our new vehicle launches.

This has reduced carbon emissions by about 312 metric tons per year, and it demonstrates the strides towards zero emissions will also come from our traditional vehicle lineup.So while EVs and AVs are key elements in our vision, our work is already underway with our current product portfolio and pipeline. And let’s talk about safety for a minute.

Our active safety features are effective, proven technologies that our customers can buy today, and they are also an important step on the road to a world with zero crashes.

Last year, General Motors partnered with the University of Michigan Transportation Institute to study the effectiveness of various GM safety-related features and the results were pretty dramatic.GM’s Forward Automatic Braking with Forward Collision Alert delivered a 46% reduction in rear-end crashes.

Our Rear Park Assist reduced backing crashes by 38%. And IntelliBeam headlamps were responsible for a 35% reduction in nighttime animal, pedestrian and bicycle crashes.

And then when you look at these technologies and you combine them, combining technologies such as Reverse Automatic Braking with Rear Cross Traffic Alert, Rear Vision cameras and Rear Park Assist, there was an 81% reduction in backing crashes.So these are safety technologies that are preventing injuries, preventing property damage and the cost to our customers and society.

In addition to the safety features I’ve just talked about, we’ve also expanded the footprint and the functionality of our exclusive Super Cruise driver assist technology. I’m really excited about this technology because it’s one of the most popular and promising technologies I’ve seen in a long time.

85% of current CT owners and Super Cruise users tell us they would prefer or only consider a future vehicle with Super Cruise and that’s a pretty powerful endorsement. Mark will have much more to share about this technology and our plans going forward.Now, let’s talk about electrification.

We’ve made tremendous strides in our electrification journey in the four years since we revealed the Chevrolet Bolt EV. And this year and next, we are intensifying our work to bring our third generation of EV technology, or BEV3 as we call it, to market across our various brands and platforms.

Just last week, we announced that we will invest $2.2 billion in Detroit-Hamtramck assembly plant to build new electric trucks and SUVs and the Cruise Origin SUV – excuse me, shared autonomous vehicle, and the GMC HUMMER EV that we revealed just last week.

This investment will create over 2,200 good paying jobs so it’s a positive development for our Detroit-Hamtramck employees and it’s also positive for General Motors’ future.

We are planning a dedicated EV Day to reveal more about our EV product, technology and infrastructure plans, and Mark will share more about that as well.But what sets the BEV3 infrastructure – or excuse me, architecture apart from our competitors and what gives us confidence is that it’s an integrated approach and we have significant opportunities for scale.

It maximizes the flexible battery architecture to create multiple entries across brands and across segments.

Doug Parks, who now heads our Global Product Development and his team, developed this holistic strategy using a design-thinking mindset to understand what customers demand from an EV so we can capitalize and lead in this very important growth segment.At the same time, we know that the vehicle is just one element of an all-electric future, so we are also focused on leveraging partnerships and technologies to build an entire EV ecosystem to meet our customers’ needs and expectations.

And this is all designed to speed the adoption of electric vehicles. We know from our research that customers want a no-compromise vehicle that is fun to drive. And for anyone in the room who hasn’t experienced instant torque, I highly recommend you do and I’m sure we can help out.They also want beautiful design. They don’t want to compromise.

They also want a robust, reliable, fast-charging network that includes home, workplace and public solutions. And they want at least 300 miles of electric range on a full charge. And finally, they want pricing that is in line with internal combustion engine-powered vehicles. So we are aggressively working on all of these customer requirements.

And we believe our new battery cell technology and manufacturing joint venture with LG Chem will bring together two leaders in battery science while creating jobs in Lordstown, Ohio. We plan to reduce cost to industry-leading levels and make EVs more affordable across a wide spectrum.

With every battery chemistry and scale improvement, we get closer to the tipping point of ICE and EV cost parity.Now another major growth opportunity for General Motors is commercializing autonomous vehicles and mobility services. AVs matter because they’ll save lives and the billions of dollars spent on debilitating injuries and property damage.

Cruise continues to make really great progress. And as I mentioned, we just revealed the Origin, which was the shared autonomous vehicle developed jointly by Cruise, by General Motors and by Honda.And in addition to Cruise’s approach to shared AVs, the advanced technology underpinning our vehicle systems continues to make them smarter and smarter.

Our new digital vehicle platform greatly expands our existing over-the-air updates capability. And when you combine that with insights that we can gain from vehicle data, we will keep growing our capabilities.

So this, along with the technology being developed at Cruise, will open up opportunities for the future of mobility, including the potential, however it evolves, for personal autonomous vehicles as we move forward.

Mark and Dan are going to talk much more about EV and AV as we move through the morning.Next, I’d like to talk just a little bit about the continued cultural transformation that we are undergoing at General Motors and that began six years ago. It all begins with our employees because they are fundamental to the vibrancy and success of the company.

Everything we accomplish depends on their abilities, their engagement and their commitment.

To reinvent transportation, diverse perspectives are critical, and I believe that we are demonstrating today the ambidexterity we need to simultaneously transform the organization while delivering today and also investing in products and services for the future.And I’m proud of what we are doing as it relates to creating gender and pay equity across the company and our ongoing work to ensure we have diverse slates for candidates and for promotional opportunities.

We really want to have a diverse and inclusive workforce, a workplace of choice and a culture where people can bring their true selves to work and where everyone understands our vision and believes their role in securing our future while sharing in this success.Now since 2009, we’ve invested more than $27 billion in the U.S. manufacturing base.

And in October, we committed to an additional $7.7 billion in facility investments that will either create new or retain over 9,000 jobs. These are good-paying jobs that support families and they support the community. And when I sit down and meet with employees from across the globe and across the country, their excitement is infectious.

They want to win and they want to be part of a team that wins, and they understand that there’s big opportunities in front of us that also come with significant changes.

They want to know how they fit in and because like you, they’re invested in our future, they want to know we’re placing the right bets on the future in our vehicles, in AV and in EV.Of course, our cultural transformation also applies to other stakeholders, including our dealers. For years, General Motors’ brands have consistently led J.D.

Power’s rankings in sales and service satisfaction and we’re working to take that even further. We have charged a new team working across the company to develop a holistic approach for customer interactions.

From the shopping experience for vehicles and services, to financing, to customer care, we want to provide a world-class, seamless and consistent experience throughout.

And I can tell you, we’re moving fast with our dedicated team.But as this industry transforms, our dealers are also navigating many changes, and we view our dealers as strategic partners.

As we improve and modernize the overall customer experience, we also have dedicated executives that are working with our dealer leadership teams and our dealer partners to maximize customer service and ensure profitability, both at a corporate level and at a dealer level.

Now we are moving quickly to the better future we envision, and we will continue to innovate to deliver safe, efficient, connected vehicles and services that lead the industry and exceed our customers’ expectations.We are delivering on our commitments in terms of our products and setting ourselves up for the future and with our fundamental financial performance.

Now I know we have work to do, no doubt, but I commit to you that we are making the right decisions to continue to drive strong performance.

And by doing these things better, faster and more safely, with our economies of scale, we believe we will win in the marketplace today and in the future, and that is how we intend to create shareholder value.So now I would like to bring Mark Reuss up to the stage..

6, for a smaller EV or we can go up to 8, 10, 12 or even 24 with two 12s stacked on top of each other.The new application has significant improvements over the previous generation, including larger footprint with lower height, higher energy density, a flexible modular design, higher-powered DC fast charging and one of the biggest advantages that this approach gives us is how much flexibility we can dial into any one program.

This allows us to be as agile as the market dictates, never locked into any one thing. We can meet the market head on, whatever it is.We can adjust on the fly if we need to. It also means we’re not spending money validating way more designs than necessary. We just slap the configuration we need into whatever product we need whenever we need it.

Again, most of our competitors lack this ability. Most of them will have to melt and re-pour.

A lot of those are one-off snowflakes, an existing architecture that has a battery that’s been put into it, which is fine, but it’s not the long-term scalable, economic, market-agile solution that we have.Nobody we know of has this combination of these levels of flexibility, speed and scale.

The GMC Hummer EV battery electric truck we announced last week that Mary mentioned is a great example of all of that. And in case you missed it, here’s the ad we ran on the Super Bowl, giving you a little bit of a tease of what’s to come here.[Video Presentation]That’s a great commercial.

But this will change a lot of minds when we show the whole truck here of what an EV can do and what it is when it’s revealed here on May 20, so we’re very excited about that.When we go to market, we’ll have 1-motor, 2-motor, 3-motor versions, offering different ranges, different performance at different price points to meet the customers wherever they may be.

If the customer wants a basic package, we’ll have that. If the customer wants true off-road capability and towing capability, we’ll have that too.

Whether or not we are first on the market, which we just might be here because we’re fall of next year, I am totally confident that we are going to be the best on the market, because we’ve engineered this strategy and this approach with these component sets, and I’m really excited about it. Our offering won’t be just one ticket.

This will be architected to be scalable and used for multiple brands with multiple variants for multiple customers.So when the market demands those variants, where can our competitors go? We can go to variant X, Y or Z quickly. We’ll be introducing multiple models a year, as market responsive as we want to be and the market dictates.

We can get into that more next month at our EV Day, but suffice to say, I really like our position heading into the area of electrification and I like it for a lot of different reasons. I think you’ll be very excited about some of the things we go into a little more detail that I’ve talked about today.

We are working hard on our own and with our partners that have developed lower-cost, better performing chemistry, and we’re making great progress. We’re developing our own intellectual property in many areas of electrification, which will greatly benefit this company in the future. But there’s a lot of vertical integration.

Again, we’ll go into more of that here next month, but this is a very, very well-thought out strategy.For instance, our battery chemistry development itself could be a new revenue stream for us down the road, and that’s just one example.

As Mary said, we’re committed to the reuse and recycling of our 100% of our end-of-life EV batteries, and we’ll be the first full-line OEM to vertically integrate and manufacture battery cells. We have the scale to provide EVs to the mass market, given our strength in North America and China.

And we have the benefits of having done all the elimination of waste and reduction of cost and reuse of parts and the materials that I talked about a little while ago. We’re applying all of that knowledge and process and more to our electric vehicle program, and it will boost the bottom line.

That’s a big reason why we keep saying we’re going to have a profitable EV program, and it’s exactly what we’re working toward every day.Everything we’re doing in the Global Product Group and everything we’re doing with Cadillac and our other brands is helping us set the stage for a giant leap forward into the electrification space.

And I believe that when all of that happens, and it is happening, we, more than any other company, automotive or otherwise, will be poised to win.So, I want to thank you very much for listening and coming today. And I want to introduce my colleague and good friend, the President of North America, Mr. Barry Engle. Thank you very much..

Thank you, Mark. Good morning, everybody. Thank you for being with us. In our time together this morning, I’d like to do several things. First, I want to give you an update on our 2019 share performance and talk a bit about how we’re navigating some of the segment shifts that are occurring in the industry.

Then we’re going to deep dive trucks to discuss how we’re thinking about and managing that really important part of the business. And we’ll end on what’s to come in 2020, including our full-size SUV launches. What we saw last year was a continuation of the segment shifts that are reshaping our industry.

Customers keep moving out of traditional sedans to crossovers and SUVs as well as trucks and vans.

And GM’s strategy to manage these changes has been to pivot, discontinuing 10 car nameplates and reconfiguring our manufacturing footprint, while at the same time strengthening our lineup of crossovers, SUVs and trucks.As a result of this proactive refocusing of our portfolio, we significantly reduced our 2019 retail car sales in the U.S.

while increasing our sales in the other more profitable growth segments. In the case of crossovers and SUVs, we delivered record retail sales and share, further increasing our number one leadership position in this segment. Similarly, in trucks and vans, we also increased retail sales and maintained our number one leadership position.

So in aggregate, our U.S. retail share was essentially flat year-over-year, maintaining our position as the best-selling OEM. I think we’ve managed to pivot pretty well.

We were able to hold total retail share despite giving up a full point to discontinued cars and despite significant production losses, both from the strike as well as our full-size truck changeover.Now the reason that we’re so focused on the retail business is because we see it as the best barometer of true consumer demand and it’s generally more profitable than fleet.

We’re committed to maintaining our position as the overall U.S. market leader. We’re particularly focused on growing our retail share and doing so in the most profitable segments. And one of those segments is crossovers, where we increased our U.S. retail sales last year by 10%, posting the industry’s largest share gain.

And much of this growth can be attributed to the strength of our unrivaled product portfolio, includes 14 nameplates with multiple entries in each of our four brands to give optimal market coverage across the subsegments. We’re leveraging common vehicle architectures and scale, now more than one million units per year in the U.S.

alone to reduce complexity and lower cost of our crossovers.At the same time, we’re managing customer-facing content and styling to maximize brand and product differentiation. Up-level sub-brands and trims provide further differentiation and drive a richer, more profitable mix. Our crossover portfolio is one of the freshest in the industry.

The average age will be just 1.6 years by the end of 2020. Examples of the new products include the recently launched Chevy Blazer, an all-new entry, which steadily gained share throughout 2019. Last year, we also introduced XT6, an important new Cadillac entry and an updated XT5, which is the brand’s best-selling model.

Together with the segment-leading XT4, Cadillac now has the freshest lineup in the lux crossover segment. And late last year, we launched an updated GMC Acadia.In 2020, this year, the new crossovers just keep coming.

We’ll launch in the high-volume compact segment two completely new additions to the Chevy and Buick lineups, the Trailblazer and the Encore GX. Additionally, we’ll launch updated models of Chevy Equinox and Traverse, Buick Envision and Terrain and – I’m sorry, Envision and Enclave as well as the GMC Terrain.

So with all this great new product, I fully expect 2020 to be another record growth year for us in crossovers. Another important and very profitable growth segment for us is trucks. And once again, we are really well positioned with an outstanding product portfolio. It’s helped us build the most successful truck franchise in the industry.

We sell more trucks in the U.S. than anybody by a wide margin. We are unique in that we have not one but two very strong truck brands and distribution channels in Chevrolet and GMC. We have award-winning midsized trucks, the Chevy Colorado, GMC Canyon.Last year, we launched our all-new full-size trucks, Chevy Silverado and GMC Sierra.

Both of these vehicles are available in light and heavy-duty versions. And in the case of Chevrolet, we recently returned to the medium-duty commercial market with a great new line of Silverado chassis cab trucks. So at GM, we love trucks. We absolutely understand how strategically important they are to our business.

And that’s why as the industry transitions from ICE to EV, we will continue to lead the way. And it starts with the all-new GMC Hummer EV, a super truck that redefines what an electric vehicle can be. And we’re going to share more of our plans at our EV Day in early March.Now let’s take a look at how these all new full-size trucks are performing.

As a reminder, 2019 was a transition year as we wound down the previous generation models and launched our all-new next-gen trucks. This was the largest launch in the history of General Motors and one of the most complex.

To maximize quality, volume and profits, we implemented a phased launch strategy, transitioning one plant at a time, launching with limited configurations and gradually expanding body styles, trims and powertrains.The light-duty versions ramped up during the first half of the year and the heavy duties began production only in the second half of the year.

What that meant in practical terms is that we had limited availability throughout the year. Given those availability constraints, we chose to concentrate our volume in retail and skewed allocation towards our relatively more profitable GMC brand.

For the full year, we gained one point of retail segment share versus prior year with GMC driving the gain. However, 2019 was really a tale of two halves.

With reasonable availability of light-duty trucks in the second half, we gained nearly five points of overall truck share versus the first half, with both brands growing share.As availability improves, we continue to see strengthening run rates. And in fact, in January, overall retail share, I just got the numbers this morning, came in at 41%.

And there is further upside as the recently launched heavy-duty trucks and light-duty diesels become more readily available. We expect continued year-over-year share – truck share gains in 2020, given a full year of uninterrupted production across the entire model range of all of our new trucks.

And as we do grow our truck business, we are focused on delivering high-quality share. Hence, the emphasis on retail and within that, you can see we’re achieving our strongest shares in the highest price bands.With the new next-gen trucks, we removed important bottlenecks to allow increased production of the more expensive crew cabs and diesels.

We also introduced two new very well-received models, the Chevrolet Trail Boss and GMC AT4. They come from the factory with lifted suspensions, big tires and enhanced off-road capabilities.

Other new features, technologies, trims and options allow our customers to configure ever more luxurious and capable trucks.This chart also demonstrates the competitive advantage of our two-brand portfolio.

Our mainstream Chevrolet brand is strong in the middle of the market, while our premium GMC brand nicely complements it and skews heavily towards the higher end.

Our strategy is to manage the mix, optimize production and increase share in the most profitable segments of the market.In our pursuit of truck profits, we remain committed to disciplined pricing and incentives. With the new trucks, we’ve been able to grow our average transaction prices for GMC and Chevrolet in both light-duty and heavy duty.

At GMC, we have the highest ATPs in the industry while Chevrolet is positioned between our two main competitors. These ATPs that you see here are full-year averages. If we look specifically at Q4, the most recent quarter, we’d see that incentives across the segment did tick up slightly.

But we responded in a disciplined, measured way, maintaining our premium, with both brands still posting solid year-over-year ATP growth.As a percentage of ATP, GMC incentives were below industry average and Chevrolet was in line. Maintaining a healthy channel mix is also key to maximum truck profits.

Compared to our main competitors, we have the lowest fleet mix. Of the fleet business that we do have, with the lowest sales to daily rental fleets, concentrating instead on more profitable commercial and government business. We also have the lowest lease penetration.

So, not surprisingly as a result of these strategies, we enjoy the highest residual values amongst our main competitors.Now starting with Chevrolet, I’d like to quickly talk about what’s new on our full-size trucks and help you understand why we’re confident in their success.

Our Chevy Silverado has earned a reputation for being the most dependable, longest-lasting truck on the road. And our new truck is simply the strongest, most advanced Silverado we’ve ever built. The improvements were based on deep insights of how real pickup owners use their trucks and include 50 new industry firsts.

We offer more trims to ensure we’ve got just the right truck for every customer. Our powertrain lineup includes best-in-class V8 horsepower and torque and an all-new light-duty diesel with a best-in-class highway fuel economy rating of 33 miles per gallon. We’re not the only ones that are impressed by this truck.Customers have taken notice as well.

In our brand tracking survey, Silverado now has the highest excellent opinion scores in the industry and is at record levels of consideration. This truck is the real deal and it further enhances our strong Silverado franchise that has been built over many years.

Unlike any of our competitors, GM has a second truck brand that we have successfully developed to target the most profitable pockets of the business.Our Sierra pickup leverages the GMC brand’s DNA of bold, capable and precisely crafted to become the only truck uniquely positioned as a premium entry.

Within GMC, we’ve developed the aspirational Denali sub-brand that ratchets up the luxury. It’s available across all GMC products, trucks and SUVS.

And if this Denali sub-brand were a stand-alone luxury franchise, it would outsell, in terms of volume, Lincoln, Infinity, Volvo, Land Rover, and it would do it with a higher average transaction price, than Mercedes, BMW or Audi.With the launch of the new Sierra pickup, we created yet another, a second sub-brand, that we call the AT4, and it’s an upscale off-road product.

Combined, the Denali and AT4 are approaching half of all new Sierra sales. The new Sierra pickups are loaded with innovations, including the world’s first 6-function MultiPro Tailgate.Sierra’s the only pickup to offer head-up display, it’s a feature normally found in luxury cars.

It also has a rear camera mirror, a great safety feature, which expands the driver’s field of rear vision. The pro grade Trailering system is a suite of new features and technologies designed to make towing safe and easy. Eight cameras provide up to 15 different views around the truck and trailer.

And the Sierra’s carbon fiber box is yet another industry-first, offering best-in-class dent, scratch and corrosion resistance. It’s the subject of one of our latest ads that we call Hurricane, and I’d like to show you the ad now.[Video Presentation]The heavy-duty versions of our all-new truck are worth a special mention.

These models, available as both a Silverado and a Sierra, began production in the latter part of the year and will be very important new weapons in our truck arsenal.

For the first time, the heavy duties are completely differentiated from their light-duty counterparts.With unique sheet metal and a bigger, bolder look, these trucks are also much more capable. Max towing capacity is up over 50% to 35,500 pounds.

This is important because heavy-duty customers, they do tow with their trucks, and they will appreciate the new Allison 10-speed transmission that we’ve mated to our proven Duramax Diesel.

Additional production capacity will also allow us to better meet demand for these high-end trucks that carry the best ATPs in the industry.Roughly 80% of our new GMC heavies have been either AT4s or Denalis with ATPs over $70,000. The success of these trucks shows there’s a real customer appetite for very capable premium trucks.

And our GMC organization knows how to sell those vehicles, and it’s the right channel to carry the new Hummer EV. The same new architecture that we’ve used for our pickups will support an all-new family of full-size SUVs.Our full-size SUVs are iconic people and cargo haulers.

The Chevrolet Suburban has been in continuous production for 85 years, making it the longest-running nameplate in the global auto industry.

Together with the Chevrolet Tahoe and the GMC Yukon, our full-size SUV franchise has historically led the industry, with over 70% market share in the U.S., while in the luxury space, Cadillac Escalade leads this segment.

Each of our entries have been redesigned to offer class-leading interior space, exclusive technologies and features and the best driving dynamics in the full-size segment.Like our pickups, these vehicles also command high ATPs, and we’ll be using similar trim mix and packaging strategies to drive profitability.

We’ve unveiled these new SUVs over the last number of weeks. They’ve been very well received and we look forward to bringing them to market in mid-2020.So as you can see, we’re focused on growing our U.S. retail business and doing it profitably in crossovers, trucks and SUVs.

Our product investments have focused in these segments and resulted in a very strong fresh portfolio. 2020 will be a good year as we benefit from the full year impact of last year’s big launches and continue to add momentum with other important new vehicle introductions this year.

We’re now going to take a 15-minute break, after which we’ll continue with our presentations. Thank you.[Break-Out Session].

Okay. Let’s get restarted. So, as Mary mentioned earlier, Matt Tsien was going to be here in person, but out of an abundance of caution, we decided to pretape his message. He is feeling absolutely fine and he’ll be joining us by phone for the Q&A session. So let me turn it over to the taping of Matt..

the Chevrolet Menlo and Baojun E200. Achieving the zero emission future requires significant investment in electrification in the near term, which will impact profitability. However, it will put us in a position to be solidly profitable in electrification over the long term.

Major challenges exist at this time, including high cost of batteries, low consumer acceptance and dependence on government subsidies. We believe achieving global scale is essential for profitability.

As Mark said, no other company can do what we’re doing.With our combination of advanced technology, flexibility and scale, GM’s China operations will benefit from GM technology and contribute to GM’s scale.

China is already the world’s largest market for NEVs, and we are applying a diverse range of new energy solutions for our global and local brands here.

Our established capability in China for battery pack testing and assembly will support the steady rollout of NEVs and help lower battery costs.With the rollout of our EV architecture, we will enjoy a complete lineup of EVs, including those in the important and growing luxury and SUV segments, translating into profitable growth.In 2019, while we launched more than 20 new or refreshed models, performance was impacted by the industry downturn, transition to the China VI emission standard, our Baojun brand transition and weaker acceptance of some of our 3-cylinder-based entries.

This year, our launch profile is going to be quite different, especially regarding propulsion. Our key launch products in 2020 will come with 4-cylinder engines.

While the 2019 launch products with 3-cylinder engines will carry through into 2020, certain products with 3-cylinder engines already in the market will be available with 4-cylinder engines starting in the second quarter.

Our launches this year will focus on luxury vehicles as well as mid and large SUVs and MPVs, which, as you have seen, have become the segments with the strongest growth in consumer demand.

Following the successful launches of the Cadillac XT6 and Buick Enclave in 2019, the Chevrolet Blazer coming this year will also tap into the large SUV segment.In the luxury market, the CT4 sedan, being launched in 2020, will give Cadillac its strongest and most complete lineup ever, enabling it to compete in all key luxury segments.

Meanwhile, our youngest local brand, Baojun, will maintain its intensive launch cadence to reinforce its new brand image and portfolio. In line with the brand’s upward move, four new models were introduced in eight months last year.As China enters an era of quality growth, consumption upgrade has led to steady growth in the luxury segment.

Cadillac maintained its positive growth momentum and posted another record year for sales in 2019, which we expect to build upon in 2020 and beyond. Cadillac’s compound annual growth rate over the past five years was 28%, significantly outperforming the overall luxury segment CAGR of 13%.

As a result, Cadillac has steadily increased its luxury market share in China from 5.4% in 2016 to 7% in 2019, a year that was impacted by the early transition to China VI in many markets.In summary, we view China as a strategic asset for General Motors.

Over the past two decades, we have established a strong foundation in China, which is key to our sustained growth in the future. We have an enduring partnership with SAIC, which has worked closely with us to drive the success of our joint ventures. Our five brands in China have broad coverage across key segments through extensive dealer networks.

In addition to our two manufacturing joint ventures, SGM and SGMW, our PATAC automotive engineering and design joint venture enables us to engage in co-development programs.

As the market becomes more mature, we have seen increasing opportunities for our successful adjacent businesses, many of them in partnership with SAIC as well.Through global collaboration, we have built a highly competitive cost structure to continuously drive costs down and drive efficiency up.

Leveraging the China market is helping GM achieve considerable economies of scale on a global basis. By 2025, about 95% of SAIC GM vehicles sold in China will share common global architectures with the rest of the world, up from about 70% in 2018.

It all adds up to our China joint ventures remaining profitable, self-funding and dividend paying to support our entire company.With that, I’d like to turn it over to my colleague, Steve Kiefer. He will give us an update on GM South America and GM International Operations. Thank you..

our suppliers, our dealers, our unions and of course, governments. Across the remaining GMI countries and markets, we’re executing a significant business transformation through core market growth and partnerships that I mentioned earlier.

One of the major elements of our strategy is the introduction of a new generation of vehicles referred to as our global family of vehicles. You’ve heard us refer to it in the past as GEM.

And these were launched last year, and I’ll talk more about that shortly.One challenge we’ve seen over the last several years, especially in South America, has been macro pressures. We’re expecting a gradual recovery over the coming years, but you’ve heard that before and we’ve heard that before as well.

So in parallel, we’re executing actions to derisk our financials, creating natural hedge where possible. So let’s zoom in on a few of the key markets, starting with South America.

As I mentioned, GM leads the market in both volume and market share, and we have for nearly 20 years in South America.We have a long and proud legacy here and our reputation shows it. In fact, Chevrolet’s brand health in South America is the strongest of that brand anywhere in the world. South America loves Chevrolet and so do we.

As I mentioned, the greatest challenge to our position in South America is the macroeconomic volatility. As all of you know, currencies have significantly devalued, the industry has contracted and inflation is significant across all the key markets. So we’ve restructured, taking our breakeven point down by 40%.

And by working with all of our stakeholders, we’ve gained significant contributions, helping us define a path to a viable and sustainable business model across South America.We’re also working to streamline and integrate our South America product portfolio, optimizing our manufacturing footprint with a focus on capacity utilization and increased localization efforts, which again will significantly reduce our FX exposure.

Now as I said, we do expect gradual improvement in the macroeconomics, which combined with our new product launches and restructuring efforts will help us reach our target of profit improvement of over $1 billion in this region. Let me move on to Korea.

Korea is another market where we’ll continue to optimize and grow.Early in 2018, we focused on optimizing our manufacturing footprint to match the demand for that region and our global demand. This led demand. This led to the closure of our Gunsan facility in 2018 and the subsequent sale of that facility in 2019.

This was a bold and difficult, yet needed step in structural cost reductions. Korea is a key production sourcing and engineering hub for General Motors, both for the Korean domestic market as well as for global vehicle and component export and global engineering support. In fact, Korea is the home to one of our very important engineering base.

We have over 3,000 engineers located in Korea who have historically taken the lead in developing some of our small vehicles.We’ll continue to fully leverage those very capable resources for our global product development.

It’s critical that we retain very strong alignment between our management and the workforce, which has historically been difficult in Korea. With the strong support of the Korean government and our Korean supply base, which is also outstanding, we will keep the Korean operations competitive and sustainable.

As a result of our restructuring efforts, we’ve eliminated $0.5 billion in structural costs, supporting our objective to secure a competitive footprint and achieve enterprise profitability from this year onward in Korea.Now, let me talk for a little bit about product and really the engine of our growth and our return to profitability across GMI.

And that’s, as I mentioned earlier, this global family of vehicles. Here’s a couple of them here, the notchback and the hatchback. This family of vehicles really simplifies our global architecture. We’re leveraging global designs and sharing components across the entire globe.

This architecture also enhances our profitability by bringing significant scale to our sourcing and improving manufacturing efficiency.

So the initial launches are now complete in key markets, such as South America and China, and we’re in the process of launching in Mexico as we speak.Let me talk a little more specifically about our first vehicle from this family in South America shown here, which is the Onix that launched last September.

The Onix brand has been a volume leader for us in South America. In fact, it has been the number one vehicle in Brazil for several years. Based on this outstanding design, the rich interior, the high safety and connectivity content shown here, the market reaction has been incredible. Slightly likes Cadillacs, the Brazilians love the Onix.

This is a great vehicle. And it now accounts for 40% of our sales in Brazil and Argentina. And it’s picked up 10% segment share since its launch last September. And all of this at a higher profit level than the vehicle it replaced.So this is the first of four vehicles that we’ll launch on this platform. And let me assure you, the best is yet to come.

Our team in South America will be launching a small SUV, shadow shown here, next month in March. And then two more vehicles will be launched by 2022. This global family of vehicles will eventually represent 75% of our sales in South America, and we will have sold more than 2 million units across GMI by the end of 2023.

In short, the global family of vehicles is important for GM in these key growth markets, especially South America, where it is contributing $0.5 billion of profit improvement, helping us meet our financial objectives and replacing the previous product.Let me just conclude with a couple of thoughts about the future of GMI.

Over the past several years, we’ve had significant focus on streamlining our operations and strengthening our partnerships to deliver a winning portfolio. We will continue to focus on profitability in these regions.

We’ve made great progress with our market leadership in South America, great progress in streamlining the operations, specifically in Korea and throughout the GMIO regions. And with this new group of global vehicles, I am confident that we will be set up for profitability in the years to come.

As all of you know, this is a very dynamic, fast-moving environment with a variety of challenges and opportunities. Our GM International team will continue to act fast, focus on profitability in every market that we serve and deliver on our commitments.

So with that, I’d like to introduce Dan Ammann, who’s going to talk to us about the future of Cruise, and I thank you for the time..

one, an awesome experience; and two, the ability to deliver this at an ultra low cost.And so a handful of the key attributes of the Origin that allow that are a useful life of over 1 million miles, which is more than 6 times more than your average car.

And that’s enabled by the fact that we’ve built the vehicle to be extraordinarily modular so we can upgrade and rev hardware and technology incredibly quickly and easily. We can replace parts that are worn and upgrade interiors and so on incredibly quickly.

And so you should think about this as much more of an aircraft MRO kind of operating model than running a traditional vehicle on the road.

So really a long useful life, really high degree of modularity, all-electric, huge and obvious enabler for cost, right? Like the idea that you’re going to build the future of transportation and have it not be all-electric is just preposterous.

So clearly, that’s a huge advantage.And then finally, on the BoM cost side, and this is the thing that I think surprised a lot of people when we revealed the Origin a couple of weeks ago, is that we are able to build this vehicle at an incredibly low total cost, not just the base vehicle, but everything that goes into it from a technology point of view as well and able to rev that significantly over time.

So huge, huge cost advantage for us in the Cruise Origin. Away from the base vehicle itself and then we start to talk about the compute and the sensors and so on.Unsurprisingly, probably, there’s just massive change in costs going on. On this dimension, the chart here shows our compute cost reduction plan.

We are developing multiple generations of compute architecture in parallel. We have a generation that’s on the car today. We’re building now the early builds of our next generation that’s going to go into the vehicles this year.

We have under very active development the generation that will be the first gen that goes into the Cruise Origin when it starts production. And the cost reduction between what’s in the cars today and what will go into the Cruise Origin on Day 1 is an 85% reduction in compute cost. So this, again, it’s not a 5% or a 10% tweak.

It’s a huge, basically, an order of magnitude change in cost reduction as we move forward there.Very similar story on the sensor side, sensor suite, it’s the same kind of level of activity and change going on in innovation and optimization of sensors, really exciting on that front as well. On the operational side, so we’re running a fleet today.

We run a fleet, obviously, for mileage accumulation to learn the kinds of things you saw in the little video there. We run the fleet for the rideshare service that we offer to our employees.And so we’re learning a lot about even at sort of 100 scale like running – what it means to run a fleet and how you drive utilization.

Between last summer and now, we’ve had a pretty significant increase in utilization. We’ll have another step change in that this year. And between last summer and the end of this year, we’ll have a 2.5x increase in our utilization rate.

So again, these are things that are moving incredibly rapidly and having a huge impact on our rate of progress.Infrastructure, we get a lot of questions on, well, how much charging infrastructure do you need? What’s that going to cost? That feels like an expensive thing.

We already operate, by far, the largest charging infrastructure setup in the Bay Area in totality. We have very significant learnings going on, on this side.

And our infrastructure team, working with our vendors on the charger side have been able to realize already between 2017 and the chargers that we’re installing in our new charging location right now, an 85% reduction in cost per kilowatt of charging capacity.So again, these are huge percentage reductions just moving these numbers really, really dramatically.

And the reason all of that matters and the reason all of that is important is back to this point, that to unlock the market opportunity, we need to figure out how to drive costs down, not just initially, that’s important, but how we drive costs down at a really significant way, at a very high rate of change over a very long period of time.So let’s talk about what commercialization can look like in the early days and how it could unfold over time.

If you take the City of San Francisco and you take just the existing rideshare business that goes on in that city today. From a customer pay point of view, we think that’s about a $3 billion market today in terms of what customers are handing over to take rides in cars today.

And that’s happening at about $3.75, somewhere between $3 and $4 a mile average cost in terms of what customers are paying.And so you got a $3 billion market happening at $3 to $4 a mile. And if we show up with a product that is safer and a better experience and lower cost, we believe we will take a meaningful chunk of that market.

So it’s not hard to imagine that just based on one city and one earlier version of product, you could build a $1 billion business out of that. That’s step number one.Then let’s say that we expanded that to the top five rideshare markets.

That’s about a $15 billion business today in terms of what customers are paying to take rideshare rides in those markets today. So now let’s say we take a meaningful share of that business because we’ve got a product that’s safer and better and cheaper for people to use. So now you’ve built a several billion-dollar business based on five markets.

And to do that, you’re talking about tens of thousands of cars.

You’re not talking about hundreds of thousands of cars; you’re talking about tens of thousands of Cruise Origins deployed in those markets.Then if we expand to the rideshare business as we know it today in the United States, that’s roughly just under a $50 billion customer pay business today.

Once you get outside of the most dense urban environments, the price point comes down today. So it’s about a – more of a $2 a mile business on average, we think.

By the time that we’re scaling into this market opportunity, we will have made dramatically more progress on the cost curves that I showed you earlier, extending that rate of improvement and rate of change that we’ve had there.

Then get it down to $1 a mile starts to get really interesting.So, what happens at that point in time is you now, you’ve left rideshare and you’re now approaching the cost of owning and operating your own car. So if you own and operate your own car and you drive 8,000 miles a year or less, cost you $1 a mile to do that.

So now we get to the point where we can deliver an awesome experience, safer than a human, and we can deliver that at a cost that’s competitive with the cost of driving your own car and we give you back the time for free.So the time you spent behind the wheel, you get back. This is a $500 billion market.

And then you can go further and say, what if we get it down to $0.60, which is the average cost of car ownership in the United States, turns out that’s a $1 trillion market. So apply whatever market share you think you might get from that and now you’ve built a really big business.

And then if you go back to the market opportunity I showed you at the beginning and you take it global and you add in delivery and logistics and in-car experience and data monetization, you grow the market opportunity again.So the point here is, we’re bringing an extremely disruptive transformational technology to a multitrillion-dollar market opportunity, and we can begin that in the places where the economics make the most compelling sense.

And we can scale that. And even out of the gates, we’re building an interesting size business, but the opportunity beyond that is really, really significant.So safer, better, more affordable but there’s also this dimension of having a positive impact on the planet.

If you go back to where I began talking about the cost of transportation being too high in terms of lives lost and money spent and time wasted and the impact on the environment, we’re not going to – the center of that is the fact that in the United States today, more than 75% of us still drive to work in a gasoline-powered car by ourselves.

And until we change that equation and until we move people to all-electric and until we move people to shared transportation and until we take the human out of the loop on the driving task, we’re not going to solve those fundamental issues around transportation.So a few fun facts to think about on framing that.

In the United States today, the car parc, there’s about 270 million cars in the United States today. There’s somewhere between, no one knows precisely, there’s somewhere between 1 billion and 2 billion parking spots in the United States. So every car has somewhere between 4 or 6 or 4 and 8 parking spaces attached to it.

And you all as financial types can think about it this way. That’s a $4 trillion investment in vehicles that are used about 5% of the time and it’s a $4 trillion investment in real estate to park those vehicles on for the other 95% of the time that we’re not using them.

So think about the inefficiency and inherent cost that comes with that from a financial point of view, but also just the amount of space that it takes up in our cities, the cost of all of that.We think this self-driving technology deployed in this mode is probably the most powerful lever we have to radically increase the share of miles traveled that are electrified.

Obviously, bringing EVs to market and scaling that will be important, but driving it on a very, very high utilization framework is really important as well. And then it’s giving people back the time that we all spend stuck behind the wheel in traffic. And then there’s the human cost.

Over the last decade – we don’t have 2019 numbers yet – so from 2010 to 2018, so nine years, more than 300,000 lives lost on the roads of the United States.

So think about the human cost of all of that.Our aspiration, initial aspiration, is to get to a superhuman level of performance to be measurably better than a human driver so we can deploy this technology and make the roads slightly better by doing that. But that’s just the beginning.

Our goal of 10x improvement every year is going to continue long after that point in time. And our aspiration is get to the point where the number is as close to zero as possible. And that may sound far-fetched and far away but I’d point you to another mode of transportation that we all use all the time that’s pretty close to that.

Commercial airlines in the United States in the last nine years, one fatality. And there’s no reason that we shouldn’t be aiming for that kind of aspiration on the roads in the vehicles that we’re using every single day. And so that is our safety aspiration.So let me leave you with a few thoughts.

It’s my view that the societal forces at work that make transportation today so costly for us make it inevitable this technology will be deployed at very large scale. It’s in my view, completely inevitable that that’s going to happen. Next point, the barriers to entry to what we’re doing are extraordinarily high.

There are very few companies that have assembled the talent and the financial resources and the partnerships and the integration with OEMs that is necessary to have a chance of making this work and making it work with large-scale.

So the field is thinning out really quickly in terms of companies that are on a track to actually make this happen a big scale.The next thing I’d leave you with is that the core technology, MVP is entirely a win not if, discussion.

And I talked about the timing of the interplay of these exponential forces and how that’s going to – how those are going to offset and why that makes very specific timing difficult to predict but I think I gave you a pretty clear sense of how close we are and what’s likely involved in this last step to get to that initial superhuman level of performance.The market opportunity is measurable and known and is measured in trillions of dollars, right? We know how big the market is.

We know what the existing products in the market are, we can measure them on experience and cost and safety. And so we know what the thresholds are to build a product that’s better than those things, and all of our energy is going to do that. So this isn’t a – let’s build it and – let thing.

We know what the existing product is and we know what we need to do to build something that’s better than that.I’ll tell you that the regulatory backdrop is fairly constructive. NHTSA and DOT are being fairly clear in communicating their desire to see this happen. And so we feel fairly good from a regulatory point of view.

The investment required in dollar versus the upside potential. We talked about – this is a multibillion-dollar activity, and that in and of itself is a barrier to entry, but it’s a multibillion-dollar investment to unlock a multitrillion dollar market opportunity.

And so from an ROI or potential upside relative to investment, it’s a hugely powerful division.And so the final thing I’d leave you with is that we have extremely high conviction in the impact that this technology is going to have and we have extremely high conviction in the impact that this technology is going to have and we have extremely high conviction on the rate of progress therefore making, and we are very much in execution mode.

Thank you..

Okay. So I have a feeling that this is the kind of crowd that likes to see numbers after lunch. So the finance guy and an engineer that warms my heart, so let’s get seated back again. What we’ll do is we’ll have a short video and followed by that, we’ll have Dhivya Suryadevara..

Good afternoon, and thanks, everyone, for being here today. So in my section, I’d like to talk about two main topics. Firstly, I want to talk about our calendar year 2019 performance and our outlook for 2020; I want to give you more color on that.

And importantly, I want to pull together what you heard today and give you a framework on how to think about our business in my second part of the presentation.So let’s get started. 2019 was an eventful year.

We had a share of challenges, but I also think we had a number of opportunities that we capitalized on that allowed us to deliver the results that we did. So let’s take a quick look at what worked and what some of the challenges were.You heard a lot about trucks today and crossovers and the performance of our new launches.

That was an important tailwind as we think about our performance in 2019. The cost savings we announced in November of 2018 remain on track.

In fact, in the calendar year 2019, we were ahead of track and we remain on track for the rest of the calendar year 2020 to deliver what we committed to.GM Financial was a bright spot from a performance standpoint. The business continues to grow and generate record levels of profitability.

And finally, from a cultural standpoint, I’ve been talking to you about cash and cash conversion for about a year now. And I think the results we have demonstrated and what we predict for 2020, I think really demonstrate the commitment of the entire team on this very important metric.

And I’ll talk more about that later in the presentation.Let’s talk about the challenges. The strike had a meaningful impact on 2019 results. The China business you heard Matt talk about today and what we’re doing there to get that business back on track. South America was volatile – more volatile than what we predicted at the beginning of the year.

And you heard Steve talk about the steps we’re taking there as well.I think the takeaway is, relative to what I talked to you about a year ago, there were a number of puts and takes. But the underlying business remains exceptionally strong and that’s what takes us into 2020 with a strong outlook.Let’s look at the actual results, the numbers.

EPS, we delivered $4.82 against an outlook of $4.50 to $4.80.

And from a cash flow standpoint, we generated $1.1 billion against our guidance of zero to $1 billion.Now, I think it’s important to also look at these results on a strike adjusted basis because it will help frame our 2020 performance and it will allow you to look at apples-to-apples comparisons.

From an EPS standpoint, we generated $6.71 on a strike adjusted basis. You may remember our original guidance last year, $6.50 to $7, so in line with our original guidance one year ago. Free cash flow, we generated $6.5 billion of cash, excluding the impact of the strike.

And when you compare that against our original guidance of $4.5 billion to $6 billion, it was clearly a strong performance that demonstrates our focus in this important area.I would like to quickly touch on regional performance before we move to 2020. North America had a strong performance, up $1 billion year-over-year.

And that’s primarily due to our launches, the strong performance of trucks, crossovers and cost savings. That helped offset international weakness around the globe. You see GMI on this page.

That was primarily China down $800 million year-over-year, offset by international operations, excluding China, up $200 million year-over-year.GM Financial, as I talked about, grew earnings and stood at $2.1 billion for calendar year 2019.

Cruise and Corp sectors performed in line with expectations.So the takeaway from this slide, excluding the impact of the strike, strong performance, especially in North America and GM Financial Operations.So let’s get into 2020. Before I get into the numbers, I want to frame for you the macro picture around the globe.

We are predicting continued volatility in all of our key operating areas. In the U.S., we’re expecting a mid-16 million light vehicle industry which is down about 0.5 million units compared to 2019.

In China, as Matt talked about, we do expect a decline in industry, about 1 million units, prior to the impact of coronavirus.Clearly, as Mary talked about, how the virus impact evolves would have an impact on 2020 performance, not just from a demand perspective, but potentially the global supply chain as well.

And the whole team is working diligently to have contingency plans in place should this become a more serious situation.In South America, we’re expecting FX pressures to continue into 2020. You all see where the Brazilian real is and you see where the Argentine peso is. Those are the two main currencies that impact our operations in South America.

And we’re expecting in 2020 that those challenges will continue and we’re managing our operations despite the volatility that we expect so that we are on a path to profitability irrespective of the FX environment.Commodities have been up and down, and you’ve seen steel and aluminum have backed off somewhat.

But importantly, palladium and rhodium have been up significantly since December. Especially rhodium was up close to 100%; palladium and other 40%, and that’s causing a significant headwind as well from a macro standpoint.Next, I want to talk about key drivers before I get into numbers.

I just covered macro and regulatory, which will be the biggest headwind that we’re seeing in 2020.

Way against that our specific performance, the factors that are specific to GM, whether it’s launches or a full year of heavy-duty and light-duty and the cost savings that we have coming up – remaining from our $4 billion to $4.5 billion target that we’ve set out for ourselves, they contribute favorably to 2020 performance.I also want to talk for a minute about strike and strike recovery.

In a normal environment, excluding the impact of the strike, when you see the industry go down, we will have had to take inventory down. Because of the strike, we have effectively overcorrected for the situation and we’re building back dealer inventory, subject to the capacity constraints that we have on our vehicle lines.

Mary and I talked about this last quarter that we’re constrained from a capacity standpoints on some of our key vehicle lines.

And the team is working together to get every unit we can across all of these, and you can see some of the results from a tailwind standpoint, offsetting the macro impact that we’re expecting in 2020.Now, obviously the industry level and the strike recovery is a toggle.

If you see a higher industry, our ability to recover strike will be lower and vice versa. So we’ll keep you updated on that as we go through the rest of the calendar year.So the takeaways from this page, the first negative is offset fully by GM specific performance as well as lean inventory balancing out to about zero.

So let’s get into the numbers.Our EPS diluted adjusted range this year is in the range of $5.75 to $6.25. To put it in context, we’re expecting an impact from non-operating items of about $0.55 per share. What are these non-operating items? We’ve talked about tax rate normalizing to a more sustainable level. 2019 was abnormally low.

We’ve talked about interest income being lower because of our cash balance.

And as in every year, we are not expecting any tailwind or headwind from our investments in Lyft and PSA, so that it neutralizes the impact of that and it allows you to look at our operating performance and focus on the core performance here.From a free cash flow standpoint, we’re expecting $6 billion to $7.5 billion, despite the impact of the challenges that I talked about from a macro standpoint, and I will be walking for you both the EPS and the free cash flow in the next couple of pages.

Before I do that, let me give you a run around the world from a regional outlook standpoint.With all the actions we’ve talked about the new launches and cost savings, we expect North America to be up year-over-year on a strike adjusted basis. So if you exclude the impact of strike, North American performance was strong in 2019.

We expect it to be better in 2020.In China, we expect continued industry and regulatory headwinds, as Matt talked about earlier. Clearly, with the virus situation, we expect a meaningfully lower equity income in China in the first quarter of 2020.

And once the situation resolves, we’re expecting an equity income in the range of about $200 million on a quarterly basis – on a run rate basis after the situation gets to be more stable one.GM International, up slightly as a result of the number of actions that Steve talked about and the new launches that are happening in the region.

GM Financial continues to grow their earning assets, but we expect residual values to normalize in 2020 and as a result their earnings to be flat to slightly down, but that would depend a lot on what’s happening with residual values on a year-over-year basis.I want to talk about cadence as well for a minute.

As in the last several years, H2 we expect to be meaningfully stronger than H1, and, as I mentioned in China, the early part of the year to be weaker than the latter half of the year. So from a total company standpoint, the outlook for EBIT is flat despite the macro headwinds that I talked about.

So let’s get into this in a little bit more detail.I’d like to walk for you the impact of all of these three factors that I talked about, starting from EPS diluted adjusted for calendar year 2019 at $6.71 that I talked about. You first layer on macro headwinds, US-China, commodities and GMF.

So that’s the biggest headwind that we are expecting in 2020. But against that, the net impact of GM specific factors, as I talked about in the prior page, is a positive. There are some puts and takes within that column.The biggest tailwind that we see in 2020 from a GM specific performance is the full-size SUV transition.

And we’ve talked about this before, how we expect to take downtime, and the ramp-up on our full-size SUVs with the level of change in the vehicles as well as the brand new architecture and three brands coming out of one architecture in one plant, we have major changeover related downtime.

And we expect to see that to be the headwind that is on a GM specific basis that’s most meaningful.I talk to you about depreciation every year. This is secularly going up as catching up to the levels of CapEx that we’ve had historically. On the positive side, launches and HDs continue to be strong, cost savings that I mentioned.

And given the interest rate environment we’re in, a small tailwind as well from pension standpoint.I talked about strike recovery. A simple way to think about it, we expect to build about 80,000 units from a dealer inventory standpoint between year-end 2019 and year-end 2020.

So you put all this together, EPS – EBIT roughly flat from the impact of operating items. And the new layer on top of that, the non-operating items, and that gets you to our EPS diluted adjusted outlook for the year.Let’s talk about cash flow. We generated $6.5 billion on a strike adjusted basis in 2019.

The biggest headwind we see on cash flow is predictable, it’s the impact of China dividend and the earnings – the year-over-year decline between 2018 and 2019 because China dividends are paid on a one-year lag basis. So that’s $800 million coming out of China dividends declining from 2018 to 2019.

But that headwind is more than offset by some of the tailwinds that we see. I talked about CapEx and CapEx normalization. We anticipate about $7 billion approximately in CapEx and in 2019 we achieved $7.5 billion. So there is a $500 million tailwind coming from CapEx.GMF dividends are expected to roughly double in calendar year 2020.

They paid $400 million, approximately, in 2019, and you see that roughly doubling – we see that roughly doubling in 2020.

Put all this together, we see growth in free cash flow, and it gets you to the range of $6 billion to $7.5 billion that we talked about.I also want to touch on the cash flow trajectory as well as cash conversion and give you a sense beyond 2020 of what to expect.

When we first talked to you about cash conversion at the end of 2018, we were generating about $4 billion cash flow level, and that was approximately 44% conversion from a net income to cash flow basis. With the results in 2019, strike adjusted at $6.5 billion, it takes our conversion up to about 62%.

And with the outlook we’ve talked about in calendar year 2020 that takes our conversion to 65% to 70%.

And you might wonder, when does that get to a close to 100%, and you’ve been talking about 100%.And if you think about the tailwinds and headwinds we’ve had from a cash flow standpoint, the biggest tailwind we expect beyond 2020 has been GM Financial dividends, the rest of their earnings to the parent.

And I’ll talk about that in a few slides on what that potential could be.And from an earnings standpoint, I’ve also talked about depreciation and pension income and those will be earnings headwinds, but we expect to – we’ll continue to work to offset that with true cash earnings as well, which will bring our conversion to an 80% to 90% level in the 2023 to 2025 time frame.

Why not 100% yet? The pension does have a long tail and the payments follow the benefit payments – the schedule that retirees have set out.

So that’s the story here, and I think this is an important slide because this showcases for you why this is an important priority and how we’re working to get that to the levels that we’ve talked about before.Okay. I want to touch briefly on operating efficiencies.

We’re on target to hit the CapEx levels that I talked about before, $7 billion in 2020, approximately. And from a cost savings standpoint, through calendar year 2019 we have achieved $3.3 billion of efficiencies. So, we have about $1 billion left to go in 2020.

So, we remain on track and wanted to give you a quick update on that.Let’s talk about capital allocation.

So, you have all that cash and what are we going to do with it? So from a free cash flow standpoint, you can see on this page, I talked about the $6 billion to $7.5 billion, which is really the net of operating cash flow and the CapEx that you see on this page. So, we have free cash flow of $6 billion to $7.5 billion.

We also have potential source from selling non-operating assets like our investment in Lyft, which we’ve been opportunistically selling and we expect to continue to do that.In terms of uses of cash, you see that on the top right of the page.

The strike has depleted our cash balance, and as you know, we have talked about that in the last earnings call, and we’re now working on replenishing that cash balance back to our target of $18 billion on an average basis.

So, we expect to use about $2 billion to $3 billion of our free cash flow towards our investment grade balance sheet, which brings us to return on capital to shareholders.

We expect to keep dividends at the same level of about $2 billion, which leaves $2 billion to $3 billion for share buybacks and other potential uses.Now, Steve talked about how we’re continuing to work on getting GMI to profitability.

To that end, if we see compelling restructuring opportunities in GMI with an appropriate payback period, we will likely use a portion of this cash for that purpose, with the rest of the remaining cash going towards share buybacks, and we will keep you posted on that as we go through the calendar year.To summarize 2020, improvement in operating performance will likely offset macro headwinds.

And again, this is a differentiator in our view. This demonstrates our commitment that macro headwinds might come and things might happen from time to time, but this team remains focused on executing our plan.

Improvement in cash flow and cash conversion, and expect to return cash to shareholders through dividends and buybacks.Before I go to the second section, I want to talk for a moment about execution.

What you see on this page is proof points of different things from a financial metric perspective that we’ve committed to, and I want to really use that as a foundation to frame our 2020 performance. Yes, we will likely see different headwinds or tailwinds that we have not predicted at the beginning of this calendar year.

But this team, as we’ve done in the past, we’re committed to delivering on our objectives in 2020 and beyond.With that, let me take you to the second section where I’d like to pull together what you heard from all the other speakers and give you a framework on how to think about our various collection of businesses.Firstly, we have a collection of highly profitable cash generative businesses where we have a leadership position, and you see all of those listed on this page.

I’m going to talk about each of them in the following pages. We do have a few turnaround opportunities, especially on the international side. And finally, you’ve heard a lot about AV and EV today, and we consider those businesses accretive from our core, given our unique positioning. So, let’s quickly talk about each of these.Trucks.

Mary talked about how this is an important business for us and how we’re growing this and we are proud of our product and our performance in this area. So, let me frame this up for you in terms of how important is this for the company. Over half the revenues in North America come from trucks, $65 billion of revenue.

And from a margin standpoint, we expect this to be in the mid to high teens. And hopefully, that gives you an additional insight on the attractiveness of this business. And I’ve talked previously about how we think this business is different from the rest of the light vehicle market.

And a quick recap of the points that we made on that topic.We believe there is pent-up demand in this sector, which is likely to continue as a tailwind from a demand standpoint for the next several years. A proof point for you is the growth we have seen in the last few years.

In the past five years alone, this segment has grown about 6% on an annualized basis. Compare that with the rest of the industry where we’ve seen a decline of about 50 basis points.

So again, this is a segment where because of the age of the fleet, the installed base and the growth that we’ve seen here, we do expect a healthy level of demand to continue in the foreseeable future.I talked about how the margins are attractive and Barry talked about how we’re the only OEM with two brands and we’re positioned really well with both the Chevrolet and the GMC brand.

I want to remind you of the competitive moats that exist in this sector as well. Historically, over 90% of the sales in this sector has been through the top three OEMs. Compare that with the rest of the light vehicle industry where that’s less than 40%.We do – you might ask, well, aren’t there new disruptors coming in.

And that’s where the next point comes in, which is really important where we believe the battery electric trucks that we will build will leverage the success that we’ve had in the ICE business. This is a business that we’ve done for over 100 years.

We know the customers well, and we have an outstanding distribution channel, and we do not intend to cede our leadership position in this very important segment.Next, I’d like to talk about GM Financial, which is another cash generative business that earns an appropriate return on its capital.

Before we talk about GM Financial’s financial contribution, I’d like to talk about what it brings to the auto industry and the auto side of the business. We had in calendar year 2019 alone over two million leads to our dealers generated through GMF, so clearly very important. From a loyalty standpoint, as a data point, over 78% leased loyalty.

So what that basically means, over 78% of the customers come back to GMF to buy a GM vehicle. And as you know, conquests are much more expensive than retaining a customer. So this allows us to strengthen the vehicle sales and help with demand there as well.Financing through the cycle is critical.

We recognize we’re in a cyclical industry, and GMF provides hard to finance customers with financing as the industry does turn. So put it altogether, this business generates return on equity in the range of low-to-mid teens, an appropriate level of return for this kind of a business.

And let’s talk about how it’s been growing over the last several years.From 2015, when we made the decision to grow this to be a full captive FinCo to 2019, we’ve seen a significant growth and we sit just shy of $100 billion from an earning assets perspective, quite significant.

And in the next several years, as we improve penetration and it continues to grow, we expect the level to be around – the assets to tail off around $125 billion. And from an earnings standpoint, we expect a corresponding growth in our earnings as well with EBT in the range of about $2.5 billion in the next several years.

And as I talked about from a cash conversion standpoint, we do expect that the net income coming out of this business will be dividend-ed back to the parent in the 2023 to 2025 timeframe, again, very important business for us.Let’s quickly touch on after sales, which is another important business and cash generative business for GM.

This has been a consistent profit contributor, and we expect it to be a consistent profit contributor going forward. This business is less cyclical than the rest of the business. And this is a growth opportunity as the car park continues to age and it sits at about 11.7 years today.

The service business for trucks is particularly attractive and it’s over 2x that of passenger cars. So, when you take the strong truck business, it translates into a strong after-sales business as well. The margins are very strong in this business as well and it keeps the customer in our ecosystem, which is very important.

Translates into a high ROIC business overall.I want to talk finally about connectivity, which is an important piece of a franchise, which is profitable and cash generative. This includes OnStar with the safety and security features. It includes remote access and other subscription businesses that we have.

Up until 2016, this business was losing customers and subscribers, and we had made a conscious decision in 2016 to turn this around and have this be a growth area. And you can see the results of that. And in 2020, we expect to have about 12 million paying subscribers in this business.

And in the future, we expect that this would grow, and the drivers of growth, obviously we get growth with GM customers, we get growth through our fleet business as well where fleet intel is an important aspect for that category of customers.From a partnership standpoint, there is many examples of things that we’ve already rolled out, whether it’s Amazon and package delivery or marketplace.

But we’re just scratching the surface in terms of how much more subscription-based businesses we can have which are high margin and just have a different kind of a revenue profile than the rest of our business. And I’m going to talk about subscriptions later in the presentation as well.

So that summarizes the cash generative portion of the franchises that we’re proud of, and they fuel the growth in a lot of the growth areas that we’ve talked about today.Let’s turn to the turnaround opportunities. Steve Kiefer talked about GM International. So, I’m not going to repeat all of that.

But that does represent a $2 billion improvement when you get the margin levels from where they were in 2018 to an appropriate level of margins, which in this business we think is mid-single digit, so a tailwind coming from restructuring of this operation.And finally, from a luxury standpoint, Mark talked a lot about this today.

This is a business that’s historically struggled in the United States and performed really well in China. And with all the exciting plans that we shared earlier today, with a refreshed product portfolio and improved segment coverage, we expect that this business will grow not only in China, but in the United States as well.

And we’ve talked about how this is our leading brand from an EV standpoint. And so this will attract a new generation of customers that the Cadillac brand currently doesn’t have to the brand.So we talked about cash generative businesses and turnaround opportunities.

I want to talk a bit more about how we think the EV, AV and other business revenue streams are accretive to our overall business. So, let’s take a quick look at where our strength lies today.Our strength is in Middle America with trucks. That’s where we sell our most vehicles, that’s where we make most of our money.

And if you look at the AV and EV opportunity that you heard about today, we expect that those businesses will first have a meaningful manifestation in areas where GM has an opportunity from a market share standpoint.

So, we think it’s very much complementary to our core business and particularly to our truck business.I talked about subscriptions previously, and I want to frame that up a little bit more in our core and our Cruise businesses, the automotive model today as you sell the vehicle and you see the customer x number of years from now.

And, as we think about and we’re working on future revenue opportunities, you heard Dan talk about the business model that Cruise is working towards and on the automotive side, whether it’s licensing or subscriptions or customer inside coming from the data we have responsibly monetized, we think those are additional revenue streams, which we’re currently not capitalizing on, which present a huge opportunity and they’re complementary to our one-time transaction nature and they’re high margins as well and highly cash generative.So in closing, I would like to leave you with this slide.

Why are we uniquely positioned relative to our competition? We have valuable franchises that are cash generative, and we have accretive growth opportunities on AV, EV and other areas that we’re laser focused on capitalizing on.

And from a cyclical standpoint, we’ve taken a number of proactive steps to strengthen the business and position us well for the cyclicality that typically comes with this business. And we believe that this positions us well with a very strong foundation to create shareholder value.With that, I thank you, all, and I bring Rocky up to start our Q&A..

Thank you. Dhivya. I’m going to request all the speakers from today to come onto the stage for the Q&A. If you have a question, please raise your hand and we’ll get a mic to you.

Just wanted to remind everyone again that the Investor Relations team is available to address any additional questions you may have, especially any detailed questions on the numbers. And what I’d suggest is that to use our time most efficiently today, we focus on some of the more strategic questions for the people on the stage today.

And Matt will be joining us on phone also. So, we’ll get him dialed in.Let’s get started. First question, Rod. Rod Lache..

Thanks. Rod Lache from Wolfe Research. Three questions. First, maybe just a quick housekeeping, Dhivya, if you can just clarify. In your guidance, how much working capital you’ve anticipated in your free cash flow and the buybacks, whether those are incorporated into the guidance..

From a working capital standpoint, while we would expect some rewind of sales allowances from a strike recovery perspective, we expect that will be offset, Rod, by other working capital items, including industry impact and timing. So, we’ve had no tailwind assumed in our free cash flow guidance from that. And your second question was....

And the buybacks....

Well, the buybacks is a use of the free cash flow. So, we expect that out of the $6 billion to $7.5 billion we generate. We would replenish our cash balance to the tune of $2 billion to $3 billion, and the remaining towards buyback and other uses..

So that’s built into your EPS guidance..

Yes..

Okay. And then just focusing on the international businesses. I was hoping that maybe you could be a little bit clearer on the GMI turnaround.

How much of this you’re going from about $1.3 billion loss to a profit is actually exiting products – or, exiting markets, how much of it is product, and then, if Matt is on the line, maybe talk a little bit about the China business and why we should believe that that business is kind of stabilizing and improving. It’s been losing some market share.

It’s down to about $200 million a quarter of profitability, mapped, and the recorded remarks mentioned a number of headwinds and spending.

Is it just underperformance related to powertrain that’s been corrected? Or is there something else here that we can look at and say that now it should start to perform in line with the rest of the industry?.

Steve, do you want to take the GMI question?.

Yes, sure. I would say that there is sort of a – we’ve talked about $2 billion. There is about $0.5 billion in this improved product that we’ve talked about that was in my slides, the new vehicles. And then I would say the remainder is a combination of cost cutting and restructuring that’s been in the plan..

Matt, are you on the line?.

Yes, I am. So thanks, Rod, for your question.

Can you hear me?.

Yes. We can hear you, Matt..

Great. Okay. Let me sort of start with 2019 and just sort of put it in context. So, in 2019, our performance was certainly impacted by industry factors in terms of the industry downturn and the China V to China VI transition, which put a lot of pricing pressure on the industry.

But there were also a number of unique, I would say, company factors that you alluded to, Rod. I mean, at SGM, I would say the most significant company level factor is the challenges with customer acceptance on 3-cylinder engines with some of our customers.

So the launches did not deliver the results we expected.And, as I mentioned in my remarks, we’re reacting quickly, and a number of the products will begin to have 4-cylinders as options as early as second quarter of this year. At SGMW, the key issue was the transition of the Baojun to a higher brand position.

This is absolutely the right thing to do for the long-term. But as the plan pivots there are transition issues that impacted SGMW’s performance.Looking into 2020, we expect that the industry downturn will continue. There will be increased fuel economy pressures and NEV pressures that will impact the industry as a whole and our performance as well.

And then there is the additional fairly heavy investment cycle that we’re into to deliver any of these for the future. So, we expect that our performance will continue to be challenged in 2020 and probably for the next couple of years.

As we get through this investment cycle and with the industry recovery, we do expect that our equity income will pick up once again..

Thank you..

Great. Next, Joe Spak.

I think you had a question?.

Maybe, just to follow on quickly from Rod’s question on South America or on GMI.

The $2 billion improvement, $1 billion was from South America that other $1 billion, does that consider some of those additional restructuring actions you talked about from that use of cash? Or would that be – is that further restructuring or exits in GMI?.

Yes. It would be – to the extent, there’s restructurings, it would be a use of cash, like we’ve talked about previously. The $2 billion is – think about it as a run rate on how we would make 5% margin on that business on an ongoing basis as opposed to the $1.2 billion or $1.3 billion we’ve lost in 2018..

Okay.

And then Mark, on the BEV3 platform, I think versus that graphic that you showed prior, you’ve added the pickup truck versus prior years – did something change there that allowed you to add to pickups to that platform versus your prior thinking that maybe, you need a stand-alone platform? And maybe, just at a very high level, you could tell us why you think you can sort of do this all more modular, because I think some of your competitors are building more specific platforms for different sizes and types of vehicles..

Yes. We started a while ago, looking at the fundamental cell content pouch versus prismatic, versus the height of the floors of different models. So, what you saw in that animation indicated that we had everything from a low floor entry with different wheel bases to a mid-floor entry.

I’m talking about height-wise to a high-floor entry, which we would have for the BET.And so as we’ve been architecting that, we’ve been looking and trying to match the market desires to the architecture, and the cell – the basic cells are pretty much all the same.

The only difference it will have is if you’re in China, we would do one type of cell structure and we’ll get into this on the EV day, but we do it in North America, it’s a different type of cell structure. But the partners are all in place.

The chemistries have been developed and vertically integrated, and that drives a different I think definition of what architecture was and what it is.And so our architecture is really around the cell and the orientation of the cell in the pack as you saw, the electric motors, we’ve got at least three different electric motors that will be vertically integrated in the power structure for that.

And then the power electronics and the global B part of it and the backbone will all be common. So, those are the big cost drivers and what is a new architecture for electric vehicles versus stampings, floor pans, rockers, chassis, pickup points, control arms.

Those are all things that used to define an architecture, because they are the high-cost internal capital spends on a volume basis for a plant.And so it’s very different. As we were architecting the first BEV, which looked like a crossover, we really started looking at what else can we do and how can we do it.

And you’ve only seen sort of the first models of BET architecture. There is another version of our BEV3 architecture that you’ll see on EV Day, and I’ll leave that as a surprise. So, if that helps frame it up a little bit. Very different..

Great. Next, move on Emmanuel Rosner..

Thank you. Emmanuel Rosner from Deutsche Bank. First question for Dan Ammann. Very refreshing to see you so bullish, optimistic about the opportunity. A lot of the other players that I have spoken recently were generally more cautious, maybe, the timeline getting pushed out and a lot of – the asset valuations coming down quite meaningfully.

For us sitting on the outside, we don’t have the benefit of being able to examine or test your technology.

I guess what should we look for to know that this is real? What do you have that the others don’t? And what kind of milestone can we track going forward?.

Well, I think the fundamental goal that most of our energy is behind now is this objective of reaching a superhuman level of safety performance, and that’s as I went through in my talk, that’s where most of the energy is and it’s where we’re making incredibly rapid progress. As I said, we’re pretty far along in reaching that level of performance.

We can see where we need to get to and we think we have the tools in place to close out that last step.As I mentioned, it’s difficult to predict exactly what the timeline is, because we’re out on the very long tail of a sort of an exponential problem and we have incredibly powerful tools that we’re bringing to those long tail issue.

And so precise timing predictions are tricky. But we feel that that is something we can see from here. And again, that’s just the starting point.

What happens once you reach that point is where things get more and more interesting.In terms of what are we doing that’s different from some others, I think one of the things that’s really helped us all the way along is testing in a very complex operating domain.

We also do some testing in a simpler environment and we know how much this helps us relative to this.

So that’s been really powerful.And then I’d say secondly, this whole idea that the Company has been built around rate of improvement as a core product of what we do and building the infrastructure to allow us to move incredibly quickly and iterate more rapidly – and I showed you lots of examples of how we’re doing that.

And so I don’t know exactly how others are thinking about that or doing it, but we have the core product of the technology stack we’re building, and then we have another equally important product of building the infrastructure that allows us to get really rapidly..

And then just the housekeeping for Dhivya if I may. So, the earnings walks are extremely helpful. If I wanted to zoom in on GMNA specifically, so you’re guiding for earnings up even versus ex-strike last year. So, call it more than $11.8 billion this year, very strong performance.

Could you maybe, talk a little bit about the puts and takes? I mean, I assume the rebuild of inventory will not be part of that walk, because last year was – the starting point is ex-strike.

So, what are the puts and takes and how should we think about that?.

So, the way to think about it, I’d say, is what you saw in that slide on the GM specific factors, the puts and takes on that primarily impact North America. So, you can take those as North American specific items.

Tailwinds, the new launches and full year of heavy duties and full year of light duties and cost saves, which predominantly impact North America positively. On the headwind side, full-size SUV downtime is what impacts North America the most.

And I mentioned about 30,000 units roughly on a strike adjusted basis and depreciation – that’s a non-cash item, but that’s – put all that together, North America positive..

Great. Thanks, Dhivya.

Itay? Joe, can you get the mic to Itay?.

Great. Thank you. Itay Michaeli from Citi. Two questions on Cruise for Dan. The first is in the slide referring to moving people, Dan, you mentioned possibly for tech partnerships. I was hoping you could elaborate on that.

Would that potentially exclude some partnerships with rideshare companies? Or is that not in the plan? And then secondly, you mentioned that the competitive field is now thinning out.

I was hoping you could talk about how many, without maybe naming names – or feel free to, how many competitors do you see that are viably competing with Cruise?.

So, on the first one, on the tech partnerships thing, I think that it’s sort of – it’s something we’re just kind of reserving as we look at global markets and that have different existing market configurations.

There could be places where partnership makes more sense than the sort of the core plan that we have of going vertically integrated.And then in terms of the field thinning out, I think this has happened over the last – I don’t know, 18 months to 24 months, and I think as people have realized that this is not something you can do with 10 or 20 or 50 people and $10 million of venture capital, it’s just a much bigger challenge than that and a much bigger scope of problem to work on.

And so I think in California there were at one point more than 60 licenses that have been issued for self-driving testing, and I don’t think when the dust settles here, there’ll be 60 companies that have really delivered mission critical safety system and that drives with superhuman level of performance at a cost point that makes it work and an experience that makes it work from a customer point of view..

Just a follow-up, maybe housekeeping for Dhivya. Back to the large SUVs, if you can – the mention of the headwind this year and also the potential – and how you think about the opportunity in 2021, particularly some of the new trims like AT4 that Barry talked about in his presentation.

Kind of how should we think about the variable profit opportunity on this platform after the launch?.

So your first question about 30,000 units on a strike adjusted basis. So, if we didn’t have SUV down during because of the strike, the delta between what you’re going to see in 2020 versus 2019 would be 30,000 down. So hopefully that helps. And, Itay, IHS has it roughly at the right level.

So if that helps us another data point, that’s another way to look at it. And in terms of profitable trims beyond 2020, AT4 and others, I’d say better profits than average, and I will leave it at that..

Great. John Murphy, I think – yeah go ahead..

Thanks very much. If we look back at 2019, I mean I appreciate the attempt to pro forma the numbers for your earnings. But the reality is what happened in 2019 happened, and if you look at the volume, it’s probably more indicative of something that would have produced in a low 15 million unit environment.

So you essentially just put up almost $5 in earnings in a low 15 million unit environment. You’re talking about another $1 billion of cost saves in your $4 billion to $4.5 billion plan.

Plus, you’re talking about some potential improvement in GMI of $2 billion.So, just curious when you roll all that stuff together, it adds a lot of credence to the idea that you just talked about a breaking even at 10 million to 11 million units and actually maybe even then some.

So I’m just curious if you kind of update us where you sit on your thoughts on sort of break-even in – it seems like you are going to do couple of bucks, at least to the next downturn. I was trying to understand how you’re thinking about that..

Yeah, John, I think that’s a really good way to think about it because if you look at the strike impacted results of $4.82 which we put up in 2019, that was after taking into account the impact of about 320,000 units down because of strike. When you market share adjust it, it translates to industry being down about 2 million units.

And so the thinking about it as a curve from our earnings at 17 million units to our 25% downturn scenario, this matches quite nicely with what you would expect in an industry down. So to your point, it does validate the downturn thesis.With the actions we’ve taken, we’ve maintained the 10 million to 11 million breakeven point for North America.

I would say we were probably hovering in the higher end of that range, and with the cost savings we’ve come closer to the lower end of the range. And as we continue to strengthen the business and the rest of the operations around the globe, our downturn scenario looks better because you have fewer cash burning operations around the globe.

So I’d say, yes, it grants some credence to the downturn thesis and you will see us address some of the other problematic areas which should be better for downturn protection as well..

Okay. And then just a second question around the subscriptions. I know it’s sort of a TBD when Dan will deliver Cruise – we’re waiting for that and we want it now, and that’s a big part of – that’s sort of an incremental subscription opportunity for you.

But you have incremental opportunities that appears on some of the more near-term things like OnStar and OTA updates as you get to sort of this digital platform that, Mark, you were talking about.So, just curious if you can give us sort of where OnStar sits right now, where that could potentially go, and as you get this digital platform in place, could we see a lot more subscription opportunity sort of in the near term.

And then Dan, what do you think the potential that you could bring to the table over time to the subscriptions? And is this recurring revenue outside of just the simple rideshare model from Cruise that you guys are kind of alluding to?.

Yes, let me take the OnStar question and the idea of paid on-hand, it’s new opportunities, new businesses that may not exist today. We’ve been really excited about our OnStar business and the growth that we’ve seen there.

Today, we’ve got about 20 million vehicles that are on the road, and only about a quarter of those are connected and paying subscription. We also have a very limited portfolio of products that we sell. Essentially, there are three.

And so – and even with all those constraints that I’ve just described, this is a business that has been growing really nicely for us. And so, if we think about over the course of time, the vehicle part will continue to grow. The 25% subscription could be something significantly higher than that.

And the portfolio can be quite a bit larger.And so, we’re engaged right now with customers and with the product development organization and trying to figure out what are those products and services that are most interesting to the customers and how do you bundle those up and how do you put them onto the vehicle, how do you sell them, how do you go to market.

And we see a very nice opportunity there with a fundamentally different margin profile than today’s hardware business. And so, I think as we go forward over the course of time, it is an area that we do want to talk to you about..

And on the Cruise side, I’d say the – we’ve all grown accustomed to the sort of pay-per-ride demand pricing environment around rideshare. I think that’s one way to do this. I think there are lots of other interesting models in terms of how you engage customers now you have them sign up and pay.

It’s obviously very early days, but I think there is a – it’s a pretty wide open field of opportunity there..

And then just one quick one. I mean, on the luxury SUV market in China is gangbusters. And you said it’s great. You have the best luxury SUV in the world in the Escalade. Are we ever going to see the Escalade in China? It seems like a huge incremental opportunity for you.

I mean, obviously it’s larger than most stuff that’s over there, but the Mercedes S-Class sells at similar price points, which just seems like a natural chance to take and try and develop that business in China?.

Does Matt want to take that or I can take it?.

Yes. Matt, did you hear the question? It was about the potential for Escalade in China..

Yes, I’d be happy to address that. First of all, Cadillac has done extremely well over the last several years and we expect that to continue to perform very well. I think the other trend that’s happening China is the movement toward larger SUVs. A couple of years ago, the largest SUVs in the market were probably what we would call C segment SUVs.

And now C segment SUVs are gaining acceptance. So there is a movement toward larger vehicles. Certainly we’ll not rule out the potential for something like Escalade..

Great. Thanks, Matt.

Adam? Adam Jonas?.

Thank you. So, I have a question for Mark and I have a question for Mary, but first a comment. I noticed that you were videotaping today’s Investor Day. It’d be great if someone could send that tape to Ford in Dearborn. I’m serious. I’ll hand deliver it myself to them if you don’t send it to them. Your team is really airtight.

I think you should be very proud of this presentation you gave. It’s a kick-ass management team up here in front of us. You are executing. You’re clearly not getting the credit. I know you deserve it. And I think many investors in the room deserve.

But over time you keep doing this and you execute on even two-thirds of what you’re talking about and it’s going to happen. So I just had to get that out there.Mark, first question for you. Can you confirm are EVs a tailwind? And specifically, I remember a year ago when you talked about getting out a hybrids and people thought you were crazy..

You didn’t..

I didn’t. It’s not looking so crazy.

I mean, can you describe maybe in financial terms or just order of magnitude how much easier – how much better life is when you don’t have to architecture those complications into the business?.

Yes, I think it’s a great question.

The hybrid piece of this – when we look at this – and we look at what it takes to bring a plug-in hybrid, a traditional hybrid, any of those to market where you’re carrying an internal combustion engine and an electrification propulsion system and you have to make them work together and you have to certify – you still have to certify, you still have to crash, you still have to pay money to carry two propulsion systems on board, I just, from a physics and engineering standpoint, can’t get my head around making money doing that in the long-haul even as a stop gap.

Even as – I mean, I’m bragging of Volt, okay. I can tell you I love the Volt. By the way, I was one of the early buyers of the Volt.So that was great too, and I get a lot of emails from Volt buyers and I get it.

But at the end of the day, if we can get the battery chemistry vertically integrated correct and cost effective and our control systems have taken everything we’ve learned from Volt and Bolt on how to use the battery to get more range and more cost-effective.

At the end of the day, the customer is going to be much, much happier doing a pure EV than a stop gap that you still have to plug it in sometimes and then hard to understand. I mean, honestly they’re hard to understand.

And so we know that because we’ve done it and we’ve done it reasonably successfully over a pretty long period of time.So, all that customer data plus the cost basis plus the engineering basis – and I told you last year, if I had another dollar of R&D from our company, I would spend it on getting the anode and cathode and the chemistry of our batteries better..

I’ll give you a dollar..

Oh yes. No, Mary. Thank you. And then everybody, thank you very much. We have really done a great job. So, anyway, that is a very impassioned speech about a very long answer to your question, but that’s the way I feel, the way I do..

Okay. And my final question for our CEO and Chairman, Mary.

At the beginning of this presentation, I was really struck by the comments about the opportunity that GM has – I stress opportunity – to really help decarbonize the fleet, decarbonize your operations and show a rate of change that is clearly resonating with everybody at the margin, investors, your customers, regulators, governments, everybody.

Would you consider, given your role as Chairman, would you consider tying a portion of management compensation, if not a significant portion, to GM’s ability to show that progress of CO2 reduction? Because I kind of have this sneaking suspicion that you can show a lot of progress quite within your wheelhouse and then it would be outstanding for your business..

So the way our compensation system is set up, in our short-term incentive plan, 25% of it is individual performance. And I can tell you that achieving the metrics we’ve put for ourselves are incorporated not into just mine or the appropriate people who sit next to me but even deeper in the organization.

So as we look at that that is definitely something we regularly report to the Board. And we’re stepping back and we’re looking and say, if you look at Scope 1 and Scope 2, very well under way. Dane Parker who runs our sustainable workplaces organization that just became our Chief Sustainability Officer, we’ve been on this journey for a while.

And so we sit in very good shape.But we have to look at Scope 3 because right now we build ICE vehicles and we’ve looked at what are the different routes, and clearly the best fastest way to have the least impact on the environment is to EVs.

And that’s another reason in addition to the technical and the fact that customers don’t understand and it’s more costly, is getting to EVs and doing it in a way that customers want to buy them as opposed to being regulated to sell them and then find the buyer. That’s our mission and that’s what we’re on.

But I would tell you that it’s already incorporated – along with several other goals, but it’s already incorporated into the metrics the Board holds me accountable for and the organization..

Great. Let’s move to Ryan, Ryan Brinkman..

Great. Ryan Brinkman from JPMorgan. Thanks for taking my question, and thank you for the disclosure that your trucks business generates roughly $65 billion of revenue at a mid to high teens adjusted EBIT margin. I think that helps to underscore for investors the attractiveness of your trucks business.

And I’m not sure if that math is so simple, but it also underscores the fact that you’re generating something like $11.5 billion of EBIT there assuming 17.5% of margin which essentially approximates all of your profit in North America, a region which has another $40 billion of revenue.So, can you talk about your plans to increase the margins and returns for your non-trucks business? And do you think there may be scope for additional rationalization of the passenger car lineup beyond that which was communicated in the November 2018 restructuring announcement?.

Yes. So just to frame up the North American operations and the various different vehicle lines, I’d say from a passenger car standpoint, Ryan, the step we took in November of 2018 takes us quite a bit far in terms of taking us away from the segments that we’re not generating an appropriate level of return.

If you look at passenger cars, with the exception of Cadillac, where we have a couple of vehicles, as well as Corvette which does make money – and a couple of those vehicles – it’s basically that. There’s no more passenger cars really in the lineup in North America.

In its other markets, as Steve talked about, we’re working on getting those to profitability.And within crossovers, it’s multiple different stories, depending on which segment do you look at. Our mid crossovers earn a very healthy level of return. Compact and small crossovers are more challenged with the pricing pressures we’ve seen.

And what Mark talked about earlier from a complexity standpoint, if you think about the parts we’ve eliminated, how we’re getting it all into fewer architectures and how we’re getting material costs down and some of the brand work that Barry is doing from a – getting the ATPs of Chevrolet and GMC and Cadillac up, I think those are on a path as well.

We clearly have more work to do, but we will continue doing that work.And internationally, you’ve seen all the other cash burning businesses which are also on a path to profitability.

So it is our goal to diversify the profitability overall and get that to – not all of them will get to truck level margins, obviously, but they will get to their appropriate level of margin..

I think it’s important to note on that too, as Dhivya mentioned, in addition to what we talked about earlier is we’re now entering into a second term of these architectures, where we already spent the money to get the mass out the first turn.

And so everything that comes online here has a much higher reuse of the core architecture level on an ICE platform. And then we move – these are positioned for two plus, okay, on a turn basis here. So we will get as many turns out of those as we can. But we’re not going to do new ones of that, if that makes sense, okay. So it’s a good place to be..

Right.

Brian? Brian Johnson?.

Brian Johnson, Barclays. I’ve lots of questions for EV days, but I’ll keep those. I guess the big question is, look, the stock price is, as you know, roughly kind of where the IPO was. It seems to many of us say you’re doing everything right in terms of GMNA, the investment in Cruise.

But I mean, how do you think about the stock price, a, and, b, to what extent are you open to strategic options? I’ll throw three out that I’ve heard around the room as well as talking to investors.One would be consolidation of some sort. Certainly that’s going on in Europe as we speak and up the highway from you.

Second, the idea – should you just become a pure play North American truck company and everything else go somewhere else? Or thirdly Cruise sort of the next-gen businesses, OnStar, arguably creating tracking vehicles for those..

So, we are always exploring opportunities that are going to create long-term shareholder value. We’re not interested in doing something that’s just a short-term path, but – and we consider all lines as, I mean, I think we are in an era right now, where a lot of people are talking to a lot of people.

I think people don’t understand how significant the work that we’re doing with Honda is when you think about fuel cells, when you think about AV and when you think about the fact with EV cells.For those of you who had a chance to see or look online for the Cruise Origin, the three teams worked together rather seamlessly.

And in order for groups to work together, there has got to be – it’s got to be at the engineering level and we’re demonstrating that and we have been. But again, we’ll consider all those opportunities. I mean, I think to get to your core question; we do feel General Motors is a compelling investment opportunity.

We feel across many of our strong franchises, you mentioned trucks, we’ve talked about OnStar, we’ve talked about mid-crossovers. We do believe China is going to be very important in the future. It’s still is a market that has tremendous growth potential.

The scale that we get allows us to compete in a way from an electrification perspective across a full range of products and across the full range of – from value brands to luxury brands.So, I will tell you there is nothing that’s off the table that we don’t think is going to create long-term value.

And we’re going to aggressively go at what we are working on of improving the business as we just talked about with some – especially the small and the compact crossover segments. The global family of vehicles has been very important around the globe for doing that.

Steve referenced that a bit.So there is the work we’re doing on the car we feel very good about, and we feel we’re getting to the final chapters in that. But then also our conviction around EV, our conviction around AV. We think it sets up General Motors to be uniquely positioned to participate strongly in the future of mobility..

Great. Thanks. Dan Levy, go ahead..

Thank you. First, just a question for Dhivya or Matt on China. Fully recognizing that coronavirus presents a whole new set of risks here.

Can you maybe help us provide some parameters on what – you’ve said down earnings but what might be a floor? Why this might not be as bad, whether it’s because you’ve already had downtime factored in, this gives you an opportunity to destock? And also on China, if we look back historically, the $2 billion a year that you’re generating in equity income, the 9% margins, given everything that’s happened in cycle at this point, is that just not at all a relevant comp for considering the forward results in China?.

Does Matt want to take that?.

Yes, Matt, do you want to start with that?.

Yes. Let me just start and then maybe Dhivya you can add to that. Obviously, the coronavirus situation right now is very concerning. It’s a very fluid situation, with updates that we’re getting on a daily basis.

As Mary had said at the beginning, our focus, first and foremost, is on the health and safety of our employees, and we certainly are very concerned about the situation on an overall basis.In terms of the impact on sales, there will be I believe a near-term impact on the overall industry.

Fundamentally, dealerships have been closed for the Lunar New Year. In some regions, they’re slowly ramping back up. In many other regions, they still remain closed. So we expect that there will be an impact on volume in the near term. Generally speaking as the crisis passes there will be some pent-up demand.

So there will be probably some bounce on the other side of it. But in terms of predicting what the overall impact of it would be to our equity income, I think it’s a little bit too early to sort of make that call.

We obviously do the very best we can to get our operations started up when they could be started up and to manage our costs and expenses, to maximize our outcome..

I would just add that. What you’re basically witnessing is a level of equity income is almost like a downturn scenario in China.

And from a level of margin standpoint as we go forward, cycling through some of the specific issues that Matt has talked about, whether it’s four cylinder engine complementing our three cylinder offering or EVs rolling out at a better margin level, that, Dan, is by what I would say catalysts for getting the equity income back to a more normalized level.

But we anticipate that happening over a couple of years as opposed to a few quarters..

I think we’ve got – sorry, Matt, go ahead. Were you saying something? I think we’ve got time for one more question. John, go ahead. Did I interrupt you? Were you saying something? Cool..

Thanks. When I think about the extremely high truck returns that you mentioned, I harken back to the beginning of the presentation and the Hummer truck.

From a consumer perspective, you’re going to be judged on and compared with Tesla’s Cybertruck, and that means certain requirements around battery size, powertrain efficiency – they’re going to be difficult to compete with. And then internally you’re competing with very high margin – the truck segment.

So how do you balance those two? Do you have to sacrifice one for the other? Or do you think that you can have your cake and eat it too?.

Well, first of all, I think we can have our cake and eat it too, because I think understanding the truck buyer and understanding those will be initially attracted to the GMC Hummer EV, and we think it’s accretive to what Dhivya talked about and I’ll let Mark talk about the proof points..

I can’t answer everything on how that truck – our competitions are going to actually come to market with that and when. So a little bit hard to tell from what – I read the same things you do, so I don’t have any inside information on that. But what I do know is that what we’re going to deliver hasn’t been really shown in its entirety yet.

And I think we’re here to win. We’re not here to compete. So I don’t think there’s anything inside GM that’s going to compete with that either. It sort of will be a very different application. Time is up, Rocky, I know. But I don’t think – I think we are here to win.

So that’s all I’m going to say, and I feel really good about it and you haven’t seen the interior, you haven’t seen the exterior. I think on May 20, and you’ll see that. Hopefully, you will feel as good as I feel. I think you will..

Great. Thanks. I’d like to thank all the speakers on the stage. And Mary, would you like to wrap up with any words? Thanks, Matt..

Sure. If I could have you for just one second, if you give me one minute to close? Thank you, all. Sorry. So I do want to thank you all for being here today. I know we’ve covered a lot and we have more to cover. I appreciate your questions. I know there is a bit more.

We’ll be able to answer those questions as we go forward.But today, our goal, as I said, when we started was to leave you with the confidence in our vision and the strategy that we’re executing and that you believe that General Motors is well positioned to lead in the future of mobility and in the industry.

We have strong franchises, as we’ve talked about, with our trucks, with our full-size SUVs, with our mid-sized SUVs, and I believe we have the strongest product portfolio in our history.We also are investing and have business leadership positions in growth areas like EV and AV and we’ll tell you a lot more about EV when we get to March 4th.

Our strong underlying business performance is driven in part because of the difficult decisions we’ve made over the last few years and our commitment that we are going to be disciplined with our capital and really work to make sure every dollar we invest is going to earn its appropriate rate of return for you, our investors, our owners.Also, we are working hard to make sure our employees understand.

When you go through this much transition and this much transformation in a short period of time, you need to make sure your employees understand how they fit in so they’re with you.

We’re spending a lot of time to make sure our employees are part of this mission, and I can tell you, as I said, they get excited when we talk to them.So just to close, I hope we see you all on March 4th, and we can hopefully continue to earn your confidence in the program that we’re executing.

We’re moving fast, the world is moving fast and our competitors and moving fast, but we’re going to continue to execute.So thank you, all, very much. Appreciate all your time today..