General Motors 2011 Annual Report Download - page 19

GENERAL MOTORS COMPANY AND SUBSIDIARIES
The market disruption of 2008 and 2009 highlighted the need to ensure certainty of availability of credit throughout economic
cycles in specific segments of the automotive financing market. In the U.S. and Canada we identified leasing and sub-prime lending
as underserved areas that could benefit from increased financing sources and competition. In 2009 we partnered with a bank to offer
incentivized leasing programs and with GM Financial to offer incentivized sub-prime retail financing in the U.S. We also partnered
with a bank to offer incentivized retail financing programs in Canada.
In October 2010 we acquired GM Financial to further bolster our offerings in the leasing and sub-prime financing segments in the
U.S. and Canada. We believe that by having our own capabilities in key segments of the market we will be able to achieve more
competition and better service from the market, while ensuring certainty of availability through the business cycles.
In April 2011 GM Financial began originating leases for our customers in Canada. Given the importance of leasing and the current
lack of availability of leasing offerings to our customers in the Canadian market (due to regulatory restrictions preventing banks and
bank holding companies from offering leasing in Canada), we believe having a captive financing offering in Canada is strategically
important to our business. GM Financial began originating leases for GM customers in Canada via FinanciaLinx Corporation in April
2011.
We will continue to expand the business of GM Financial in targeted areas, including wholesale lending, that we view as strategic
and to otherwise evaluate opportunities in specific segments of the automotive financing market, both in the U.S. and internationally.
We expect any expansion of GM Financial or any arrangements with other financing providers will complement our important
relationship with Ally Financial.
Restructuring Activities
Restructuring and early retirement programs in Spain, the U.K. and Belgium were essentially completed in 2010 and we also
initiated a program in Germany in 2010. Through December 31, 2011 these programs had a total cost of $1.1 billion and affected a
total of 6,700 employees and included the closure of the Antwerp, Belgium facility. We expect to incur an additional $0.1 billion,
primarily in 2012, to complete these programs, which will affect an additional 500 employees.
We implemented a voluntary separation program in Brazil in the three months ended December 31, 2011. A total of 900 employees
participated in the program at a total cost of $0.1 billion. At December 31, 2011 a majority of the 900 employees have left the
Company with the remainder expected to leave by March 31, 2012. All charges and liabilities related to this program were recorded in
the three months ended December 31, 2011 as employees accepted offers.
Special Attrition Programs, Labor Agreements and Benefit Plan Changes
2011 GM-UAW Labor Agreement
In September 2011 we entered into a collectively bargained labor agreement with the International Union, United Automobile,
Aerospace and Agriculture Implement Workers of America (UAW). The agreement covers the wages, hours, benefits and other terms
and conditions of employment for our UAW represented employees. The key terms and provisions of the agreement are:
• Lump sum payments to eligible U.S. hourly employees of $5,000 were paid in October 2011 totaling $0.2 billion. Additional
lump sum payments of $1,000 will be paid annually in June of 2012, 2013 and 2014 totaling $0.1 billion. These lump sum
payments are being amortized over the four year agreement period.
• An annual payment of $250 per U.S. hourly employee upon attainment of specific U.S. vehicle quality targets.
• An increase in wages for certain entry level employees hired on or after October 1, 2007.
General Motors Company 2011 Annual Report 17