40730--2/28/2008--GENERAL_MOTORS

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{competitive, industry, competition}

{condition, economic, financial}

{loss, insurance, financial}

{capital, credit, financial}

{operation, international, foreign}

{investment, property, distribution}

{cost, contract, operation}

{product, market, service}

{cost, operation, labor}

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{cost, regulation, environmental}

{gas, price, oil}

GENERAL MOTORS CORPORATION AND SUBSIDIARIES Shortages and increases in the price of fuel can result in diminished profitability due to shifts in consumer vehicle demand. Our continued ability to achieve structural and materials cost reductions and to realize production efficiencies for our automotive operations is critical to our ability to achieve our turnaround plan and return to profitability. Delphi may not be able to obtain sufficient financing to finalize its Plan of Reorganization for approval by the Bankruptcy Court. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Financial difficulties, labor stoppages or work slowdowns at key suppliers could result in a disruption in our operations and have a material adverse effect on our business. Economic and industry conditions constantly change, and the anticipated near-term negative economic outlook in the United States and elsewhere will create challenges for us that could have a material adverse effect on our business and results of operations. We operate in a highly competitive industry that has excess manufacturing capacity. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Our long term growth and success is dependent upon our ability to grow and operate profitably in emerging markets. A significant amount of our operations are conducted by joint ventures that we cannot operate solely for our benefit. Increase in cost, disruption of supply or shortage of raw materials could harm our business. A decline in consumer demand for our higher margin vehicles could result in diminished profitability. The pace of introduction and market acceptance of new vehicles is important to our success. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Our significant investment in new technology may not result in successful vehicle applications. We have agreed to fund a trust pursuant to the Settlement Agreement that will require us to contribute significant assets in a relatively short time period. If we are not be able to implement the terms of the Settlement Agreement, including the terms of the New VEBA, our extensive OPEB obligations will remain a competitive disadvantage to us. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Even if we are able to successfully implement the terms of the Settlement Agreement by establishing and making the required contributions to the New VEBA, the earliest we will be able to benefit from associated cash savings would be 2010. Our pension and OPEB expenses are affected by factors outside our control, including the performance of plan assets, interest rates, actuarial data and experience and changes in laws and regulations. Our extensive pension obligations to retirees are a competitive disadvantage for us. We could be materially adversely affected by changes or imbalances in currency exchange and other rates. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Our liquidity position could be negatively affected by a variety of factors, which in turn could have a material adverse effect on our business. Further reduction of our credit ratings, or failure to restore our credit ratings to higher levels, could have a material adverse effect on our business. The U.S. federal government is currently investigating certain of our accounting practices. The final outcome of these investigations could require us to restate prior financial results or result in other adverse consequences. We have determined that our internal controls over financial reporting are currently not effective. The lack of effective internal controls could adversely affect our financial condition and ability to carry out our strategic business plan. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Our indebtedness and other obligations of our automotive operations are significant and could have a material adverse effect on our business. Our businesses outside the United States expose us to additional risks that may materially adversely affect our business. New laws, regulations or policies of governmental organizations regarding safety standards, or changes in existing ones, may have a significant negative impact on how we do business. We are subject to significant risks of litigation. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Risks related to our 49% ownership interest in GMAC General business, economic and market conditions as well as continuing weakness in the residential mortgage market may significantly affect the operating results of GMAC s business and earnings and may require us to record an impairment of our equity investment in GMAC. If GMAC s equity capital decreases, it may not be able to pay dividends or may pay partial dividends on the Preferred Membership Interests that we hold. GMAC s automotive finance business is critical to our operations and provides financing support to a significant share of our global sales; if GMAC is unable to provide financial support in its current form our business will be materially adversely affected. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Rating agencies have recently downgraded their ratings for GMAC and ResCap, and there could be further downgrades in the future. Future downgrades would further adversely affect GMAC s ability to raise capital in the debt markets at attractive rates and increase the interest that GMAC pays on new borrowings, which could have a material adverse effect on GMAC s results of operations and financial condition. GMAC s business requires substantial capital, and if GMAC is unable to maintain adequate financing sources, GMAC s profitability and financial condition will suffer and jeopardize GMAC s ability to continue operations. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Recent developments in the residential mortgage market may continue to adversely affect GMAC s revenues, profitability, and financial condition. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Recent negative developments in the secondary mortgage markets have led credit rating agencies to make requirements for rating mortgage securities more stringent, and market participants are still evaluating the impact. GMAC s indebtedness and other obligations are significant and could materially adversely affect its business. GMAC s earnings may decrease because of increases or decreases in interest rates. GENERAL MOTORS CORPORATION AND SUBSIDIARIES GMAC s hedging strategies may not be successful in mitigating its risks associated with changes in interest rates and could affect its profitability and financial condition, as could its failure to comply with hedge accounting principles and interpretations. GMAC s residential mortgage subsidiary s ability to pay dividends to GMAC is restricted by contractual arrangements. A failure of or interruption in the communications and information systems on which GMAC relies to conduct its business could adversely affect GMAC s revenues and profitability. GMAC uses estimates and assumptions in determining the fair value of certain of its assets, in determining GMAC s allowance for credit losses, in determining lease residual values and in determining GMAC s reserves for insurance losses and loss adjustment expenses. If GMAC s estimates or assumptions prove to be incorrect, its cash flow, profitability, financial condition and business prospects could be materially adversely affected. GENERAL MOTORS CORPORATION AND SUBSIDIARIES GMAC s business outside the United States exposes it to additional risks that may cause GMAC s revenues and profitability to decline. GMAC s business could be adversely affected by changes in currency exchange rates. GMAC is exposed to credit risk, which could affect its profitability and financial condition. General business and economic conditions of the industries and geographic areas in which GMAC operates affect its revenues, profitability and financial condition. GENERAL MOTORS CORPORATION AND SUBSIDIARIES GMAC s profitability and financial condition may be materially adversely affected by decreases in the residual value of off-lease vehicles. Fluctuations in valuation of investment securities or significant fluctuations in investment market prices could negatively affect revenues. Changes in existing U.S. government-sponsored mortgage programs, or disruptions in the secondary markets in the United States or in other countries in which GMAC s mortgage subsidiaries operate, could adversely affect the profitability and financial condition of GMAC s mortgage business. GENERAL MOTORS CORPORATION AND SUBSIDIARIES GMAC may be required to repurchase contracts and provide indemnification if it breaches representations and warranties from its securitization and whole-loan transactions, which could harm GMAC s profitability and financial condition. Significant indemnification payments or contract, lease or loan repurchase activity of retail contracts or leases or mortgage loans could harm GMAC s profitability and financial condition. A loss of contractual servicing rights could have a material adverse effect on GMAC s financial condition, liquidity and results of operations. GENERAL MOTORS CORPORATION AND SUBSIDIARIES The regulatory environment in which GMAC operates could have a material adverse effect on its business and earnings. The worldwide financial services industry is highly competitive. If GMAC is unable to compete successfully or if there is increased competition in the automotive financing, mortgage and/or insurance markets or generally in the markets for securitizations or asset sales, GMAC s margins could be materially adversely affected. Certain of GMAC s owners are subject to a regulatory agreement that may affect GMAC s control of GMAC Bank.

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40730--2/28/2008--GENERAL_MOTORS_CORP