David Einhorn of Greenlight Capital Letter to GM Shareholders

To Our Fellow Shareholders of General Motors Company:

It has been six and a half years since General Motors Company (“GM” or the “Company”) completed its initial public offering at $33 per share. And despite what the Company calls its “26th consecutive quarter of strong results,” GM’s stock currently trades at about $34. The S&P 500 index has more than doubled in that time.

As best we can tell, GM does not recognize its $34 stock price is a problem and has no plan to address the discount to its intrinsic value. Shareholders should not be as complacent or content as GM’s management and its Board of Directors have been in addressing this discount.

We encourage you to take action and vote for change at GM.

At this year’s Annual Meeting of Shareholders, Greenlight Capital (GLRE) and its affiliates (“Greenlight”) have nominated three outstanding candidates for the GM Board and are seeking support for a resolution that calls upon the Board to split GM’s common stock into two classes of common equity (the “Plan”), that we believe would unlock tens of billions of dollars in value for shareholders.

Our nominees will bring new perspectives and fresh thinking to the Board and a critical focus on translating the operating performance of GM’s business into a higher stock price for shareholders. We believe our Plan will solve GM’s capital structure issue contributing to the stock’s discounted value, and expand the market for the Company’s common stock. More information about our director candidates and the Plan is available in our proxy statement and our shareholder presentation, both of which can be accessed at www.UnlockGMValue.com.

GM has asked you to maintain the status quo by voting for its nominees and against our Plan. Their principal argument is that they are continuing to sell vehicles and generate profits. And while that is undeniable, it is also undeniable that:

  • GM’s operating performance has not translated into value for shareholders, with total shareholder returns since GM’s IPO averaging just 2% per year.
  • GM has the lowest price-to-earnings (P/E) ratio of any of the 500 companies in the S&P 500. It ranks 500 out of 500. It also trades at a lower P/E ratio than all but one of its global industry peers and substantially lower than its closest competitor, Ford (F).
  • GM’s management team and directors have not articulated any strategy or action they believe they can take – other than waiting for the Company to survive through the next down cycle – to drive the Company’s valuation closer to its intrinsic value or to otherwise generate higher returns for shareholders.
  • The Company’s CFO recently sold over 20% of his GM stock, reflecting a resignation to today’s low stock price and lack of optimism for the future valuation.

The current directors – who collectively own little stock and whose strategy can be summarized as “wait and see” – seemingly believe that “the market” will one day potentially reflect GM’s true value.

One thing we can assure you: Our nominees for the GM Board are not content merely to wait for the capital markets to someday recognize and fully value the operating performance of the Company. Instead, our nominees believe there are actions that can be taken by the Company immediately to address the inefficient capital structure and make GM’s stock more attractive to investors, including by implementing our Plan.

We believe this Plan is one of a number of actions the GM Board should be considering to improve GM’s valuation and drive returns for shareholders. But GM is instead doing nothing and asking you to simply be patient and to vote against the Plan. Indeed, if GM has a strategy to change the trajectory of the stock’s six-plus year sideways performance or increase its embarrassing, bottom-of-the-S&P 500 P/E ratio, we have not heard it.

We encourage you to vote for our nominees – Leo Hindery, Jr., Vinit Sethi and William N. Thorndike, Jr. – who will bring their exceptional backgrounds in operating large and complex companies, investing in the capital markets, and evaluating capital structures into the GM boardroom. Our nominees have the background, determination, and skills to help us all. They will not stand by and wait for better days; they will seek to unlock value for all GM shareholders now. Please return the enclosed GREEN proxy card today – or vote online or by phone – to bring these fresh perspectives onto the GM Board.

We recommend you do not vote on GM’s white proxy card of surrender. While GM and its directors may be resigned to the Company’s stock price, valuation and shareholder returns, we will not surrender to that thinking. Neither should you.


/S/ David Einhorn