FOR RELEASE: October 12, 2000
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DETROIT - General Motors Corp. (NYSE: GM) today reported $1.55 diluted earnings per share of GM $1-2/3 par value common stock in the third quarter of 2000, an increase of more than 16 percent from $1.33 in the prior-year period. The increase in earnings per share was primarily due to the continued focus on improving shareholder returns through ongoing stock-repurchases.

"We're pleased that GMAC had record profits and GM's North American automotive operations generated continued strong results and posted improved net income during the third quarter compared with the same period last year," said GM Chairman John F. Smith, Jr. "However, overall automotive net income was down slightly in the third quarter primarily due to the profit decline in Europe, which along with the other regions faced unrelenting competitive pressures during the period."

GM North America reported third-quarter net income of $728 million, up 8.5 percent from $671 million in the third quarter of 1999. "Demand remains strong in the North American market, but the pricing environment is extremely competitive and is forcing all players to accelerate cost reductions," Smith said.

GM President and Chief Executive Officer G. Richard Wagoner, Jr., noted that in North America vehicle sales remained strong in the third quarter despite production ramp-ups at two North American truck assembly plants that resulted in lower truck production. Higher incentives and other marketing costs were more than offset by continued improvements in material and manufacturing costs.

"These results reinforce the need to step-up our efforts to eliminate waste and lower costs," Wagoner said. "But we will not take our eye off our objective of becoming a fast-moving, innovative, product-focused company.

"The industry continues to venture into new territory -- near- record demand mixed with unprecedented price pressures and intensely strong competition on all fronts. It has heightened our sense of urgency to drive toward our vision objectives," Wagoner said.

Results in the European market were affected by a critical model changeover -- the launch of the new Opel/Vauxhall Corsa, GM's highest volume model. This start-up combined with overall unfavorable country mix and intensifying price pressures hurt the European results.

GM's Latin America/Africa/Mid-East region posted its fourth- consecutive profitable quarter despite the start-up of GM's new assembly plant in Brazil. The modest loss in the Asia-Pacific region was primarily due to the start-up at GM Thailand.

Wagoner said GM's aggressive future-product plan and its global growth strategy would not be interrupted due to the challenging environment.

"We're focused globally on bringing out innovative new products and services that will delight our customers, attract new ones and boost our bottom line," Wagoner said. "Examples include the new Corsa and the pending launch of the exciting Opel/Vauxhall Speedster in Europe. In North America, there's the coming debut of the Chevrolet Avalanche with its unique "midgate" between the spacious cabin and cargo bed, the Buick Rendezvous "crossover" sport-utility vehicle (SUV), and our all-new midsize SUVs, as well as the expansion of OnStar services.

"All of our business priorities -- innovative products and services, e-business leadership, growth in the Asia-Pacific region and proactive participation in the industry's consolidation, as well as strong business results -- remain unchanged," Wagoner said.

GMAC delivered record third-quarter results despite the impact of higher short-term interest rates in North America and Europe. GMAC's mortgage operation was the subsidiary's biggest contributor to the earnings improvement, due to lower servicing costs and an increase in domestic mortgage originations.

Hughes Electronics' net sales and revenues increased 4.5 percent to $2.1 billion in the third quarter, from $2.0 billion in the same period a year ago. "The increase was driven primarily by continued growth in the DIRECTV business, which added a record 450,000 net subscribers in the United States during the quarter," said GM Vice Chairman Harry J. Pearce.

Pearce added that, "Due to rapid consolidation in the media and telecommunications industries, GM is now considering alternative strategic transactions involving Hughes and other participants in those industries. Any such transaction might involve the separation of Hughes from General Motors. GM's objective in this effort is to maximize the enterprise value of Hughes for the long-term benefit of the holders of GM's Class H and $1-2/3 par value common stocks through a structure that maintains the financial strength of General Motors." No assurance can be given that any transaction will be agreed upon with any party or that other conditions, including any stockholder or regulatory approvals, will be satisfied.

In the fourth quarter this year, GM North America and GMAC are expected to deliver solid results consistent with last year's performance despite the current market environment. GM Europe is facing a very competitive pricing environment and is expected to remain in a continuing significant loss position in the fourth quarter, as are GM Asia Pacific and Hughes.
Go To: General Motors 2000 Highlights - Q3 Financial Results
General Motors Consolidated Statements of Income 3rd Quarter '00

In this news release, use of the words anticipate, expect, should, believe, plan, intensify, overcome, opportunities and similar words are associated with forward-looking statements that are inherently subject to numerous risks and uncertainties. Accordingly, there can be no assurance that the results described in such forward-looking statements will be realized. The principal risk factors that may cause actual results to differ materially from those expressed in forward-looking statements contained in this news release are described in various documents filed by GM with the U.S. Securities and Exchange Commission, including GM's Annual Report on Form 10-K for the year ended Dec. 31, 1999, filed March 13, 2000, (at page II-20).

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