Statement re GM To Accelerate Balance Sheet

GM To Accelerate Balance Sheet Strengthening Initiative 
 
    NEW YORK, June 20 -- General Motors Corp. (NYSE: GM, GMH) today announced 
plans to offer an aggregate of approximately $10 billion in debt securities and 
convertible debentures as part of an overall effort to accelerate improvements 
in GM's balance sheet and financial flexibility. 
    GM plans to raise approximately $10 billion with the new offerings, 
effectively doubling the company's original balance-sheet-strengthening target 
for 2003 -- to $20 billion from $10 billion -- and increasing the company's 
near-term liquidity to more than $30 billion.  GM currently expects that 
substantially all of the proceeds will be used over time to partially fund 
GM's U.S. pension funds and other retiree benefit obligations.  GM expects to 
make significant cash contributions to these funds by late 2003. 
    In addition, General Motors Acceptance Corp. (GMAC) will seek to raise 
approximately $3 billion as part of its ongoing funding plan for 2003, 
intended to be used for general corporate purposes.  GMAC also decided to 
undertake these debt offerings in order to satisfy funding of ongoing 
operations. 
    'The general cost of borrowing in U.S. markets is at historic lows and we 
are acting quickly to take advantage of the favorable capital markets 
environment,' said GM Vice Chairman and Chief Financial Officer John Devine.  
'These offerings give GM the opportunity to strengthen its balance sheet while 
freeing up cash and improving financial flexibility. 
    'One important purpose of these offerings is that they will allow General 
Motors to use cost-efficient, long-term debt to provide near-term funding of 
some of its pension and retiree benefit obligations,' said Devine. 
    GM's offerings are expected to include intermediate- and long-term debt in 
U.S. dollars and euros, as well as U.S. dollar debentures that are convertible 
into GM $1-2/3 par value common stock. 
    As a result of these offerings by GM, the company now expects that it will 
be in a position to accelerate efforts to fund its U.S. pension plans -- which 
were $19.3 billion underfunded at the end of 2002.  GM previously stated that 
it would contribute about $15 billion to its U.S. pension and retiree benefit 
plans by 2007.  Contributions to the plans help to reduce the unfunded 
position by increasing the asset base, which earns tax-free returns.  GM 
contributed $5.8 billion to its U.S. pension and retiree benefit plans during 
2002 and an additional $1.2 billion in GM Class H common stock in 2003.   
    The improved equity markets have resulted in asset returns for the GM 
pension plans of about 9 percent so far this year.  Over the same time period, 
however, the discount rate used to measure liabilities for accounting purposes 
has declined by an estimated 75 - 100 basis points, resulting in an increase 
to the unfunded portion of GM's employee benefit plan liabilities. 
    GM currently anticipates that substantially all of the proceeds of its 
offerings will be used over time to partially fund GM's U.S. pension funds and 
other retiree benefit obligations, although no determination has yet been made 
as to the amount of proceeds that would be used for such purposes and the 
allocation of any contribution of proceeds among its various retiree benefit 
programs. 
    The offerings of U.S. dollar denominated debt securities by GM and GMAC 
will be registered under the Securities Act of 1933, as amended, with the 
Securities and Exchange Commission.  GM and GMAC expect that certain of the 
debt securities will be offered outside the United States in transactions not 
registered under the Securities Act, which securities may not be offered or 
sold in the United States absent registration or an applicable exemption from 
the registration requirements. 
    This press release shall not constitute an offer to sell or the 
solicitation of an offer to buy, nor shall there be any sale of these 
securities in any state in which such offer, solicitation or sale would be 
unlawful prior to the registration or qualification under the securities laws 
of any such state. 
    In this press release, our use of the words 'expect,' 'anticipate,' 
'estimate,' 'forecast,' 'objective,' 'plan,' 'goal,' 'pursue' and similar 
expressions is intended to identify forward looking statements.  While these 
statements represent our current judgment on what the future may hold, and we 
believe these judgments are reasonable, actual results may differ materially 
due to numerous important factors, including those described in GM's most 
recent report on SEC Form 10-K (at page II-18), which may be revised or 
supplemented in subsequent reports on SEC Forms 10-Q and 8-K.  Such factors 
include, among others, the following: changes in economic conditions, currency 
exchange rates or political stability; shortages of fuel, labor strikes or 
work stoppages; market acceptance of the corporation's new products; 
significant changes in the competitive environment; changes in laws, 
regulations and tax rates; and, the ability of the corporation to achieve 
reductions in cost and employment levels to realize production efficiencies 
and implement capital expenditures at levels and times planned by management. 
 
SOURCE  General Motors Corporation 
    -0-                             06/20/2003 P 
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