General Motors was the world’s largest automaker, with unit sales of 8.

5
million vehicles in 2001-15.1% worldwide market share-and had been the
world’s sales leader since 1931. It was founded in 1908 and had manufacturing
operations in more than 30 countries. Its vehicles were sold in more than 200
countries. Its other major product lines included:

1) Financial services for automotive, finance and business financing

2) Satellite television and commercial satellite services
3) Locomotive and heavy-duty transmissions

The sales of GM’s international revenues were growing as a percentage of the

overall revenue. Its share in Latin America was 20%, 10% in Europe and 4% in
Asia.

General Motor’s treasurer’s office was responsible for the financial risk
management. This included foreign exchange, interest rate and commodities
exposures as well as counterparty, corporate and operational risks. Hedging
activities for foreign exchange were concentrated in 2 centres:

1) The Domestic Finance group in New York handled FX hedging for GM

entities located in North America, Latin America, Africa and the Middle
East
2) The European Regional Treasury Centre (ERTC) was GM’s largest foreign
exchange operation, covering European and Asia Pacific FX exposures

Eric Feldstein, Treasurer and Vice President, finance for GM had to find the
solutions to CAD deviation, ARS deviation and Yen exposure. He had to
understand what the policy permitted and what were the consequences of
each exposure. Based on this, he had to decide the best strategy for GM as a
consolidated global entity.