General Motors December 21

General Motors: change to Sell from Underperform

The following is a summary of a UBS full-length report on this topic, dated December 21, 2005.

* Near term risks: Delphi and GMAC sale:
Near term risks are significant for GM and GMAC primarily due to the
risk of a strike at Delphi and the possibility that a buyer might not
be found for GMAC. However, we don't expect a prolonged strike at
Delphi and believe that a buyer will likely be found for GMAC.

* Medium term risks:
We believe that the risk of credit deterioration and of a Chapter 11
filing has significantly increased over the next 1-2 years for GM.
Even if GM can resolve the Delphi situation and sell GMAC during the
first half of 2006, the company will still face major hurdles in
stemming cash burn and stabilizing credit deterioration.

* We downgrade GM to B- from B+:
In light of increased risks, we downgrade GM to "B-" from "B+". We
maintain a "Deteriorating" credit trend.

* We change opinion on GM to Sell from Underperform:
We recommend that investors sell GM bonds. In light of the potential
for a sale of GMAC, from a relative value perspective we prefer GMAC
bonds that we cover with maturities not later than 2010, that we
consider to be fairly valued. We recommend that investors consider
whether reducing/eliminating positions in GM/GMAC bonds is appropriate
given an investor's risk tolerance profile.