Outcome: Successfully Withdrawn
WHEREAS: In the past two years higher, more volatile fuel prices in the U.S. has changed the purchasing patterns of consumers disrupting the financial health of our company. The latest federal projections suggest gasoline prices will be significantly higher over the next decade (Energy Information Administration, Annual Energy Outlook, 2006).
In the U.S., passenger cars and light trucks account for one-fifth of all annual U.S. carbon dioxide emissions linked to climate change.
General Motors bears the auto industry’s highest “carbon burden” – or total carbon dioxide emissions associated with its fleet, due in part to the poor fuel efficiency of its products, not just the size of its fleet.
Worldwide consensus that greenhouse gas (GHG) emissions need to be reduced continues to grow, with ratification of the Kyoto Protocol causing many countries to enact limits on these emissions. Already, the European Union and some U.S. states have enacted similar limits, and Canada’s reduction target of 25% is due by 2010.
In September 2004, the California Air Resources Board adopted regulations requiring new vehicle GHG emissions reduction in California starting in model year 2009; other states are following. Roughly, one-quarter of the US vehicle market is currently required to meet California’s standards, which will include GHG emissions standards.
Increasingly stringent fuel efficiency standards in major markets are creating business opportunities markets favorable to automakers with lower carbon burdens and agility in introducing clean technology vehicles.
Competitors Honda and Toyota, whose fleetwide fuel economy averages are already higher than average, have been moving quickly to introduce advanced technology vehicles with low GHG emissions to consumers. Toyota successfully introduced hybrid vehicles to the U.S. market in 1998, and has moved to the second generation of hybrid technology. Toyota and Honda are projected to dominate the market for hybrids over the next five years.
While GM is investing in advanced technologies such as hybrids and hydrogen fuel cells and plans to bring some advanced technologies and some improved conventional technologies to market in select products, our Company has not reported to investors its expectations for reductions in GM’s overall carbon burden or its ability to meet near-and long-term emerging global competitive and regulatory scenarios.
The shareholders request that a committee of independent directors of the Board assess (a) how the Company will ensure competitive positioning based on emerging near and long-term GHG regulatory scenarios at the state, regional, national and international levels, (b) how the Company plans to comply with California’s greenhouse gas standards, and (c) how the Company can significantly reduce GHG emissions from its national fleet of vehicle product (using a 2005 baseline) by 2015 and 2025, and report to shareholders (at reasonable cost and omitting proprietary information) by September 1, 2006.
We believe management has a fiduciary duty to carefully assess and disclose to shareholders all pertinent information on its response associated with climate change, particularly as it relates to an emerging business reality. Last year Ford agreed to this request and published its report in December 2005.