40730--3/28/2006--GENERAL_MOTORS

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{competitive, industry, competition}

{loss, insurance, financial}

{condition, economic, financial}

{financial, litigation, operation}

{cost, contract, operation}

{capital, credit, financial}

{debt, indebtedness, cash}

{operation, international, foreign}

{product, market, service}

{cost, operation, labor}

{system, service, information}

{tax, income, asset}

{acquisition, growth, future}

{regulation, change, law}

{gas, price, oil}

GENERAL MOTORS CORPORATION AND SUBSIDIARIES Delphi may seek to reject or compromise its obligations to us through its Chapter 11 bankruptcy proceedings. We have guaranteed a significant amount of Delphi s financial obligations to its unionized workers. If Delphi fails to satisfy these obligations, we would be obligated to pay some of these obligations. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Our health-care cost burden is one of our biggest competitive challenges, and if we do not make progress on structurally fixing this issue, it will continue to be a long-term threat to GM. Our extensive pension and OPEB obligations to retirees are a competitive disadvantage for us. We have recently experienced a series of credit rating actions that have downgraded our credit ratings to historically low levels. 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. 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. GM s recent restatement of its prior financial statements could negatively impact its rights and obligations under certain contracts to which it is a party, including its $5.6 billion standby credit facility, which could under certain circumstances materially adversely affect GM s future liquidity. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Continued failure to achieve profitability may cause some or all of our deferred tax assets to expire. Restrictions in our labor agreements, including the JOBS bank provisions in the UAW agreement, could limit our ability to pursue or achieve cost savings through restructuring initiatives, and labor strikes, work stoppages or similar difficulties could significantly disrupt our operations. The government is currently investigating certain of our accounting practices. The final outcome of these investigations could require us to restate prior financial results. GENERAL MOTORS CORPORATION AND SUBSIDIARIES We operate in a highly competitive industry that has excess manufacturing capacity. The bankruptcy or insolvency of a major competitor could result in further competitive disadvantages for us in relation to that competitor. Shortages and increases in the price of fuel can result in diminished profitability due to shifts in consumer vehicle demand. A decline in consumer demand for our higher margin vehicles could result in diminished profitability. Our indebtedness and other obligations of our automotive operations are significant and could materially adversely affect our business. GENERAL MOTORS CORPORATION AND SUBSIDIARIES 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. The pace of introduction and market acceptance of new vehicles is important to our success. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Economic and industry conditions constantly change and could have a material adverse effect on our business and results of operations. Changes in existing, or the adoption of new, laws, regulations or policies of governmental organizations may have a significant negative impact on how we do business. Our businesses outside the United States expose us to additional risks that may cause our revenues and profitability to decline. GENERAL MOTORS CORPORATION AND SUBSIDIARIES A failure of or interruption in the communications and information systems on which we rely to conduct our operations could adversely affect our business. We could be materially adversely affected by changes in currency exchange rates, commodity prices, equity prices and interest rates. We are subject to significant risks of litigation. Risks related GM s finance, mortgage and insurance businesses We are considering the sale of a controlling interest in GMAC as well as exploring strategic and structural alternatives for ResCap. There is a risk that these initiatives may not occur, or if they do occur, they may not delink GMAC s credit rating from GM s credit rating or maintain ResCap s investment grade credit rating. In addition, any such initiative, if completed, would reduce our interest in their earnings going forward. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Our finance, mortgage and insurance businesses require substantial capital, and if we are unable to maintain adequate financing sources, our business, results of operations and financial condition will suffer and jeopardize our ability to continue operations. GENERAL MOTORS CORPORATION AND SUBSIDIARIES We are exposed to credit risk which could affect the business, results of operations and financial condition of our finance, mortgage and insurance operations. Our earnings may decrease because of increases or decreases in interest rates. Our hedging strategies may not be successful in mitigating our risks associated with changes in interest rates. ResCap s ability to pay dividends and to prepay subordinated debt obligations to GMAC is restricted by contractual arrangements. GENERAL MOTORS CORPORATION AND SUBSIDIARIES We use estimates and assumptions in determining the fair value of certain of our assets, in determining our allowance for credit losses, in determining lease residual values and in determining our reserves for insurance losses and loss adjustment expenses. If our estimates or assumptions prove to be incorrect, the business, results of operations and financial condition of our finance, mortgage and insurance operations could be materially adversely affected. General business and economic conditions of the industries and geographic areas in which we operate affect the business, results of operations and financial condition of our finance, mortgage and insurance operations. GENERAL MOTORS CORPORATION AND SUBSIDIARIES Our business, results of operations 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 our mortgage subsidiaries operate, could materially adversely affect the business, results of operations and financial condition of our mortgage business. GENERAL MOTORS CORPORATION AND SUBSIDIARIES GMAC may be required to repurchase contracts and provide indemnification if GMAC breaches representations and warranties from its securitization and whole loan transactions, which could harm our business, results of operations and financial condition. Significant indemnification payments or contract, lease or loan repurchase activity of retail contracts or leases or mortgage loans could harm our business, results of operations and financial condition. A loss of contractual servicing rights could have a material adverse effect on our operations. GENERAL MOTORS CORPORATION AND SUBSIDIARIES The regulatory environment in which GMAC operates could have a material adverse effect on its business. The worldwide financial services industry is highly competitive. If we are 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, our margins could be materially adversely affected.

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40730--3/28/2006--GENERAL_MOTORS_CORP