Company Name: General Motors Corp.
Public Availability Date: April 11, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
From: CFLETTERS
Sent: Thursday, March 29, 2007 8:41 AM
To: *****
Cc: *****
Subject: FW: Request for No-Action LetterAttention: Tamara M. Brightwell
Attachments: trinity health.pdf
From: anne.t.larin@gm.com [mailto:anne.t.larin@gm.com]
Sent: Wednesday, March 28, 2007 7:01 PM
To: CFLETTERS
Cc: rowan@bestweb.net
Subject: Request for No-Action LetterAttention: Tamara M. Brightwell
Ladies and Gentlemen:
This is a filing, pursuant to Rule 14a-8(j), to omit the proposal received on
December 14, 2006 from Catherine Rowan representing Trinity Health (attached to
this message in PDF format) from the General Motors Corporation proxy materials
for the 2007 Annual Meeting of Stockholders. The proposal requests that the
company report "on the implications of rising health care expenses and how it is
positioning itself to address this public policy issue without compromising the
health and productivity of its workforce." As described in the last paragraph of
Ms. Rowan's letter, Trinity Health co-filed this proposal with the Amererican
Baptist Home Mission Society, which acted as the lead filer, with Ms. Rowan as
the contact person for the proposal. General Motors
intends to omit the proposal under Rule 14a-8(i)(7) on the grounds that it deals
with a matter related to the company's ordinary business, and has already
received a no-action letter on these grounds referring to the identical proposal
submitted by the American Baptist Home Mission Society as lead filer.
Health care costs are a significant expense for General Motors, and managing
health care costs for GM employees and retirees and their dependents is a key
factor in GM's business operations. In fact, "Address Health Care Burden" is one
of the four elements that make up GM's announced turnaround plan for its North
American operations. These health care costs are closely related to the mundane,
day-to-day operations of the Corporation. As a result, a proposal dealing with
health care expenses is related to our ordinary business and may be excluded
under Rule 14a-8(i)(7).
The Staff recently took a no-action position on a very similar proposal dealing
with health care costs, as "relating to the company's ordinary business
operations (i.e., employee benefits)." Kohl's Corporation (January 8, 2007). As
a general matter, proposals dealing with employee benefits have been treated as
dealing with ordinary business and therefore excludable under Rule 14a-8(i)(7).
See, e.g., BellSouth Corporation (January 3, 2005); International Business
Machines Corporation (December 20, 2004). Proposals that deal with health care
benefits and costs and with the effect of changes in health insurance costs have
consistently been deemed excludable as relating to ordinary business operations.
See, e.g., International Business Machines Corporation (January 13, 2005)
(requesting a board report on the competitive impact of rising health insurance
costs); Sprint Corporation (January 28, 2004); SBC Communications Inc. (January
9, 2004). Even a proposal that deals with health care costs in a broader
context, requiring the company to provide information about health costs and
support the establishment of a national health insurance system, has been
treated as ordinary business and therefore excludable. International Business
Machines Corporation (January 21, 2002).
As a provider of health care benefits, GM is active in monitoring and attempting
to reduce the costs of health care. Concerns about health care costs are handled
by a variety of groups within GM including Human Resources and Labor Relations,
Strategic Planning, Government Relations, and Public Policy. In addition, the
Public Policy Committee of GM's Board of Directors has oversight over matters
related to employee health and safety. Either viewed as a matter of employee
benefits or as a significant expense in the Corporation's operations, health
care costs are a routine part of General Motors' business. The current proposal
about health care costs should be treated as relating to GM's ordinary business
of providing employee benefits, and therefore excludable under Rule 14a-8(i)(7).
Please inform us whether the Staff will recommend any enforcement action if this
proposal is omitted from the proxy materials for General Motors' 2007 Annual
Meeting of Stockholders. GM plans to begin printing its proxy material at the
beginning of April. We would appreciate any assistance you can give us in
meeting our schedule.
Sincerely yours,
Anne T. Larin
Attorney and Assistant Secretary
c: Catherine Rowan
Anne T. Larin
GM Legal Staff
Phone: 313-665-4927
Fax: 313-665-4979
[INQUIRY LETTER]
December 18, 2006
G. Richard Wagoner Jr.
General Motors Corp.
MC 482-C38-B71
300 Renaissance Center
P.O. Box 300
Detroit, MI 48265-3000
Dear Mr. Waggoner.
Trinity Health is the beneficial owner of over $2000 worth of shares of common
stock in General Motors Corporation. Proof of ownership of common stock in
General Motors is enclosed. Trinity Health has continuously held stock in
General Motors for over one year and intends to retain the requisite number of
shares through the date of the Annual Meeting.
We are deeply concerned about the escalating cost of health care and its impact
on Ford and its employees. The U.S. Census Bureau report, "Income, Poverty, and
Health Insurance Coverage in the United States: 2005", found that the number of
uninsured people in the United States continues to escalate and the number of
workers without employer-sponsored insurance coverage has increased.
As a faith-based institutional investor, we view our investments not only in
terms of profitability, but also on how they protect the dignity of the human
person and our natural environment. We support accessible, affordable and
equitable health care for all, and advocate for measures to reduce the number of
uninsured individuals in our nation, particularly vulnerable populations. Acting
on behalf of Trinity Health, I am authorized to notify you of Trinity Health's
intention to present the enclosed proposal for consideration and action by the
stockholders at the next annual meeting, and I hereby submit it for inclusion in
the proxy statement n accordance with Rule 14-a-8 of the General Rules and
Regulations of the Securities Exchange Act of 1934.
Trinity Health is filing this proposal along with the American Baptist Church
Home Mission Society who is the lead filer for this proposal. I will serve as
the contact person for the filers of this proposal. We look forward to
discussing the issues addressed in this proposal at your earliest convenience.
Sincerely,
/s/
Catherine Rowan
Corporate Responsibility Consultant, representing Trinity Health
enc
[APPENDIX]
Universal Health Care Policy General Motors 2007
The provision of health insurance is crucial to productivitythe HR Policy
Association estimates that the annual cost of reduced productivity stemming from
the lack of coverage is at least $87 billionand can be critical to attracting
and relaining talented workers. Employer-based coverage is an essential part of
America's health insurance system and will continue to be so for the near term.
However, the cost of employer-sponsored health plans has increased by bearly 75
percent since 2000, with premiums increasing more rapidly than either inflation
or wage growth. Health insurance costs are now among the fastest-growing
business expenses for American corporations, In fact, The McKinsey Quarterly
predicted that the average Fortune 500 company could see health benefit spending
equal profits as soon as 2008.
According to Business Week, "The biggest issue for Corporate America in 2005 and
beyond is getting out from under the crushing burden of costly medical-care
benefits." Soaring costs are putting upward pressure on cost structures and
cutting into profits. They also make it difficult for American companies to
compete in the global market place.
A study by the Manufacturers Alliance and the National Association of
Manufacturers found that structural costs, of which the largest component by far
is health care, add almost 23 percent to the price of doing business in the
United States. Wilbur Ross, the investor responsible for restructuring Bethlehem
Steel, estimated in a recent issue of The New Yorker that American companies are
confronted with a 15 percent cost disadvantage versus firms from countries with
universal health care.
Major American corporations are feeling the effects. Our company's CEO recently
stated: "[GM's] health care expense represents a significant disadvantage versus
our foreign-based competitors. Left unaddressed, this will make a big difference
in our ability to compete in investment, technology and other key contributors
to our future success." GM's CEO is not alone. The Economist recently speculated
that many American executives harbor similar sentiments and the U.S. Chamber of
Commerce has identified the cost of health care as an issue affecting the
ability of U.S. corporations to compete in global markets.
According to the Deloitte Center for Health Solutions, current attempts to hold
down the cost of coverage are not demonstrating appreciable results. And
eliminating benefits altogether is not a viable option either. According to
Ford's 2004/5 Sustainability Report, "Long-term, national solutions are needed."
In the meantime, state legislatures are beginning to address health coverage.
Four states have passed universal health care bills, at least eight more are
under consideration and an additional seven states are studying the possibility
of a universal system.
Resolved: Shareholders request that the company report (at reasonable cost and
omitting proprietary information) on the implications of rising health care
expenses and how it is positioning itself to address this public policy issue
without compromising the health and productivity of its workforce. The report
should be completed by June 30, 2007 and need not address specific benefit
offerings.
[STAFF REPLY LETTER]
April 11, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: General Motors Corporation
Incoming letter dated March 28, 2007
The proposal requests that the board prepare a report examining the implications
of rising health care expenses and how General Motors is addressing this issue
without compromising the health and productivity of its workforce.
There appears to be some basis for your view that
General Motors may exclude the proposal under rule 14a-8(i)(7), as relating to
General Motors' ordinary business operations (i.e., employee benefits).
Accordingly, we will not recommend enforcement action to the Commission if
General Motors omits the proposal from its proxy materials in reliance on rule
14a-8(i)(7).
Sincerely,
/s/
Tamara M. Brightwell
Special Counsel
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