SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549-1004





                                    FORM 8-K
                   CURRENT REPORT PURSUANT TO SECTION 13 OF
                     THE SECURITIES EXCHANGE ACT OF 1934



          Date of Report
(Date of earliest event reported) April 12, 1999
                                  --------------




                           GENERAL MOTORS CORPORATION
            -----------------------------------------------------
            (Exact name of registrant as specified in its charter)




      STATE OF DELAWARE                 1-143                 38-0572515
----------------------------   -----------------------    -------------------
(State or other jurisdiction   (Commission File Number)   (I.R.S. Employer
 of incorporation)                                         Identification No.)




   100 Renaissance Center, Detroit, Michigan                 48265-1000
3044 West Grand Boulevard, Detroit, Michigan                 48202-3091
--------------------------------------------                 ----------
  (Address of principal executive offices)                   (Zip Code)







Registrant's telephone number, including area code       (313)-556-5000
                                                         --------------




















                                    - 1 -

ITEM 5.  OTHER EVENTS

         On April 12, 1999 General Motors Corporation (GM) announced that the GM
Board of Directors  approved the complete  separation of Delphi from GM by means
of a  tax-free  spin-off.  GM's  consolidated  financial  statements  have  been
restated to reflect  Delphi as  discontinued  operations and were filed on April
15, 1999 on a Form 8-K dated April 12,  1999.  Included as part of this Form 8-K
is GM's restated Management's Discussion and Analysis of Financial Condition and
Results of Operations that corresponds to the restated financial statements.

                                 * * * * * *


                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

  Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations

   The following management's discussion and analysis of financial condition and
results  of  operations  (MD&A)  should be read in  conjunction  with the Hughes
Electronics  Corporation  consolidated  financial  statements  and  MD&A for the
period ended December 31, 1998,  included as Exhibit 99 to this Annual Report on
Form 10-K,  and the  Delphi  Automotive  Systems  Corporation  (Delphi)  and the
General Motors Acceptance Corporation (GMAC) Annual Reports on Form 10-K for the
period ended December 31, 1998,  both filed  separately  with the Securities and
Exchange  Commission.  The  financial  data  related to Delphi is  presented  as
discontinued  operations for all periods  presented and Electronic  Data Systems
Corporation  (EDS) is  presented as  discontinued  operations  for 1996.  Hughes
Electronics  Corporation,  prior to the December 17, 1997  restructuring  of the
company,  is hereinafter  referred to as "former Hughes," and Hughes Electronics
Corporation,  subsequent to the December 17, 1997  restructuring of the company,
is hereinafter  referred to as "Hughes." All earnings per share amounts included
in the MD&A are reported as basic.
   GM presents separate supplemental consolidating financial information for
the following businesses:  Automotive, Electronics and Other Operations and
Financing and Insurance Operations.
   GM's reportable  operating  segments  within its Automotive,  Electronics and
Other Operations business consist of:

   .  General Motors Automotive (GMA), which is comprised of four regions: GM
      North America (GMNA), GM Europe (GME), GM Asia/Pacific (GMAP), and GM
      Latin America/Africa/Mid-East (GMLAAM), Delphi, Hughes, and Other.
      GMNA designs, manufactures, and markets vehicles primarily in North
      America under the following nameplates:  Chevrolet, Pontiac, GMC,
      Oldsmobile, Buick, Cadillac, and Saturn. GME, GMAP and GMLAAM meet the
      demands of customers outside North America with vehicles designed,
      manufactured and marketed under the following nameplates: Opel,
      Vauxhall, Holden, Isuzu, Saab, Chevrolet, GMC, and Cadillac.
   .  Hughes  includes  activities  relating to  designing,  manufacturing,  and
      marketing advanced technology electronic systems,  products,  and services
      for the telecommunications and space industries.
   .  The Other  segment  includes the design,  manufacturing  and  marketing of
      locomotives   and  heavy-duty   transmissions   and  the   elimination  of
      intersegment transactions.

   GM's  reportable  operating  segments  within  its  Financing  and  Insurance
Operations  business  consist of GMAC and Other.  GMAC provides a broad range of
financial services,  including consumer vehicle financing,  full-service leasing
and fleet leasing,  dealer financing,  car and truck extended service contracts,
residential  and  commercial  mortgage  services,  and  vehicle  and  homeowners
insurance.  The  Financing  and Insurance  Operations'  Other  segment  includes
financing entities operating in Canada, Germany and Brazil.
   The  disaggregated  financial  results  for GMA have  been  prepared  using a
management  approach,  which is consistent with the basis and manner in which GM
management  internally  disaggregates  financial information for the purposes of
assisting in making internal operating decisions. In this regard, certain common
expenses were allocated  among regions less precisely than would be required for
standalone financial  information prepared in accordance with generally accepted
accounting  principles (GAAP) and certain expenses (primarily certain U.S. taxes
related to non-U.S. operations) were included in the Automotive, Electronics and
Other Operations' Other segment.  The financial results represent the historical
information used by management for internal decision making purposes; therefore,
other data  prepared to represent  the way in which the business will operate in
the future, or data prepared on a GAAP basis, may be materially different.





                                    - 2 -
                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS

   In 1998, GM's  consolidated  income from continuing  operations  totaled $3.0
billion or $4.40 per share of $1-2/3 par value common stock,  compared with $6.5
billion or $8.52 per share of $1-2/3 par value  common stock and $4.1 billion or
$5.08 per share of $1-2/3 par value common stock in 1997 and 1996, respectively.
   The  1998  financial  results  were  impacted  by  charges  of  $228  million
after-tax,  or $0.35 per share of $1-2/3 par value common stock,  resulting from
GM's  1998  competitiveness  studies  (see  Competitiveness  Studies).  The 1997
financial  results  were  impacted  by two  significant  items:  a $4.3  billion
tax-free  gain, or $5.91 per share of $1-2/3 par value common  stock,  resulting
from the December 17, 1997 completion of the strategic  restructuring  of former
Hughes (see Hughes Financial Review); and charges of $3.1 billion after-tax,  or
$4.34 per  share of $1-2/3  par value  common  stock,  resulting  from GM's 1997
competitiveness studies (see Competitiveness  Studies).  Excluding the impact of
these and other  special  items of $44  million  in losses  and $476  million in
income for 1998 and 1997,  respectively,  income was $3.3 billion,  or $4.82 per
share of $1-2/3 par value common stock and $4.9  billion,  or $6.40 per share of
$1-2/3 par value common stock for 1998 and 1997, respectively.
   On February  5, 1999,  Delphi  completed  an initial  public  offering of 100
million shares of its common stock,  which  represented 17.7% of its outstanding
common  shares.  On April  12,  1999,  the GM Board of  Directors  approved  the
complete  separation of Delphi from GM by means of a tax-free  spin-off in which
80.1 percent of the ownership of Delphi,  452.6 million  shares of Delphi common
stock now owned by GM, will be  distributed  on a pro-rata basis to owners of GM
$1-2/3 par value common  stock,  and if GM receives a favorable  ruling from the
Internal  Revenue  Service prior to May 14, 1999, GM will  contribute  the other
2.2% of Delphi  shares it owns,  12.4 million  shares,  to a Voluntary  Employee
Beneficiary  Association  (VEBA) trust to fund benefits to hourly  retirees.  If
such a ruling is not received,  the additional 2.2 percent of Delphi shares held
by GM also will be distributed to GM stockholders, in which case the same record
date of May 25, 1999 and payment date of May 28, 1999 will be used.
   The financial data related to GM's investment in Delphi prior to the approved
May,  1999 spin-off is classified  as  discontinued  operations  for all periods
presented.  The  financial  data of Delphi  reflect  the  historical  results of
operations and cash flows of the  businesses  that were  considered  part of the
Delphi business segment of GM during each respective period; they do not reflect
many significant changes that will occur in the operations and funding of Delphi
as a result of the  separation  from GM and the IPO. The Delphi  financial  data
classified  as  discontinued  operations  reflect  the  assets  and  liabilities
transferred  to  Delphi  in  accordance  with the  terms of a master  separation
agreement  to which  Delphi and GM are  parties  (the  "Separation  Agreement").
Delphi and Delco Electronics Corporation ("Delco Electronics"),  the electronics
and mobile  communication  business that was  transferred  to Delphi in December
1997,  were under the common control of GM during such periods;  therefore,  the
Delphi  financial data include  amounts  relating to Delco  Electronics  for all
periods  presented,  although Delco  Electronics  was not integrated with Delphi
until December 1997.  GM's 1998,  1997 and 1996 net income  includes Delphi as a
discontinued  operation.  Delphi had net  losses of $93  million in 1998 and net
income  of $215  million  and  $853  million  in 1997  and  1996,  respectively.
Additional  information regarding the spin-off of Delphi is contained in Note 23
to the GM consolidated  financial  statements  filed on Form 8-K dated April 12,
1999.
   GM completed the split-off of Electronic  Data Systems  Corporation  (EDS) on
June 7, 1996 and, accordingly,  the financial results related to EDS through the
split-off  date have been  reported as  discontinued  operations.  GM's 1996 net
income,  includes  EDS as a  discontinued  operation  through  the June 7,  1996
split-off.  EDS  income  totaled  $10  million in 1996.  Additional  information
regarding  the  split-off of EDS is contained in Note 23 to the GM  consolidated
financial statements filed on Form 8-K dated April 12, 1999.

Automotive, Electronics and Other Operations
--------------------------------------------

   Highlights of financial performance by GM's Automotive, Electronics and Other
Operations  business  were as  follows  for the years  ended  December  31,  (in
millions):

                                        1998        1997        1996
                                        ----        ----        ----
Manufactured products sales and revenues
GMA                                 $125,683    $134,121    $127,590
Hughes                                 5,964       5,128       4,009
Other                                  2,629       8,894       8,458
                                    --------    --------    --------
  Manufactured products sales and 
     revenues                       $134,276    $148,143    $140,057
                                    ========    ========    ========

Net income (loss)
GMA                                   $1,634        $449      $2,337
Hughes                                   272         471         184
Other                                   (279)      4,245         338
                                       -----       -----      ------
  Income from continuing operations    1,627       5,165       2,859
Discontinued operations                  (93)        215         863
                                      ------       -----       -----
  Net income                          $1,534      $5,380      $3,722
                                       =====       =====       =====

   The amounts above and the GMA and Hughes Financial Reviews that are presented
on pages 4  through  9  reflect  the  change  in GM's  organizational  structure
resulting  from the  restructuring  of former  Hughes.  As such,  Hughes amounts
exclude Delco and Hughes Defense and Other includes Hughes Defense.

                                    - 3 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMA Financial Highlights

                                            Year Ended December 31,
                                            -----------------------
                                        1998 (1)    1997 (1)    1996 (1)
                                        --------    --------    --------
                                               (Dollars in Millions)
GMNA
Manufactured products sales 
  and revenues                       $94,201    $100,256     $93,382
                                      ------     -------      ------

Pre-tax income (loss)                  2,409        (249)        836
Income tax expense (benefit)             787        (272)         54
Earnings of nonconsolidated associates
  and minority interests                  13         (35)         37
                                     -------          --        ----
GMNA income (loss)                    $1,635        $(12)       $819
                                       =====          ==         ===


GME
Manufactured products sales 
  and revenues                       $25,036     $24,106     $25,528
                                      ------      ------      ------

Pre-tax income                           740         256       1,053
Income tax expense                       319         121         168
Earnings of nonconsolidated associates
  and minority interests                  (2)       (152)       (107)
                                       -----         ---         ---
GME income (loss)                       $419        $(17)       $778
                                         ===          ==         ===


GMLAAM
Manufactured products sales 
  and revenues                        $7,403      $8,572      $6,723
                                       -----       -----       -----

Pre-tax (loss) income                   (471)        536         667
Income tax (benefit) expense            (213)         43         106
Earnings of nonconsolidated associates
  and minority interests                  83         174          81
                                        ----         ---        ----
GMLAAM (loss) income                   $(175)       $667        $642
                                         ===         ===         ===


GMAP
Manufactured products sales 
  and revenues                        $2,923      $2,980      $3,001
                                       -----       -----       -----

Pre-tax (loss) income                    (82)       (235)         63
Income tax expense (benefit)               9         (29)         32
Earnings of nonconsolidated associates
  and minority interests                (152)         34          79
                                         ---        ----        ----
GMAP (loss) income                     $(243)      $(172)       $110
                                         ===         ===         ===



GMA (2)
Manufactured products sales 
  and revenues                      $125,683    $134,121    $127,590
                                    --------    --------    --------

Pre-tax income                         2,594         279       2,600
Income tax expense (benefit)             902        (149)        353
Earnings of nonconsolidated associates
  and minority interests                 (58)         21          90
                                     -------        ----      ------
GMA income                            $1,634        $449      $2,337
                                       =====         ===       =====



(1)Adjustments  have  been  made to GMA's  results  to  reflect  the  impact  of
   adjustments to Delphi's  management basis financial  statements in connection
   with its separation.
(2)GMA's results include  eliminations of activity  between GMNA, GME,  GMLAAM,
   GMAP.











                                    - 4 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES
<TABLE>

Vehicle Unit Deliveries of Cars and Trucks - GMA
<CAPTION>

                                                         Years Ended December 31,
                                                         ------------------------
                                     1998                              1997                                1996
                        ------------------------------      ------------------------------      ------------------------------
                                               GM as                               GM as                               GM as
                                               a % of                              a % of                             a % of
                        Industry      GM      Industry      Industry      GM      Industry      Industry      GM      Industry
                        --------      --      --------      --------      --      --------      --------      --      --------
                                                                   (Units in Thousands)
<S>                       <C>      <C>        <C>            <C>         <C>       <C>            <C>        <C>        <C>
GMNA
  United States
 
   Cars                   8,184     2,459      30.0%          8,289      2,689      32.4%         8,528     2,786      32.7%
   Trucks                 7,787     2,150      27.6%          7,212      2,077      28.8%         6,931     2,007      29.0%
                         ------     -----                    ------      -----                   ------     -----
     Total United States 15,971     4,609      28.9%         15,501      4,766      30.8%        15,459     4,793      31.0%
   Canada                 1,427       428      30.0%          1,424        451      31.7%         1,203       381      31.7%
   Mexico                   664       175      26.3%            496        143      28.9%           332        89      26.8%
                         ------     -----                    ------      -----                   ------     -----
  Total GMNA             18,062     5,212      28.9%         17,421      5,360      30.8%        16,994     5,263      31.0%
                         ------     -----                    ------      -----                   ------     -----
GME
   Germany                4,036       548      13.6%          3,792        566      14.9%         3,746       581      15.5%
   United Kingdom         2,546       329      12.9%          2,445        338      13.8%         2,282       328      14.4%
   Other West Europe      9,737       851       8.7%          8,942        804       9.0%         8,444       780       9.2%
                         ------     -----                    ------      -----                   ------     -----
   Total West Europe     16,319     1,728      10.6%         15,179      1,708      11.2%        14,472     1,689      11.7%
   Central/East Europe    2,828       129       4.6%          2,918        125       4.3%         2,405       100       4.2%
                         ------     -----                    ------      -----                   ------     -----
   Total GME             19,147     1,857       9.7%         18,097      1,833      10.1%        16,877     1,789      10.6%
                         ------     -----                    ------      -----                   ------     -----
GMLAAM
  Brazil                  1,533       344      22.5%          1,943        410      21.1%         1,731       384      22.2%
  Venezuela                 174        45      25.8%            178         48      26.7%            68        16      23.5%
  Other Latin America       864       129      14.9%            885        130      14.7%           784       114      14.5%
                         ------     -----                    ------      -----                   ------     -----
   Total Latin America    2,571       518      20.2%          3,006        588      19.6%         2,583       514      19.9%
  Africa                    614        81      13.2%            673        106      15.7%           681        81      11.9%
  Middle East               747        54       7.2%            693         52       7.5%           664        66      10.0%
                         ------     -----                    ------      -----                   ------     -----
   Total GMLAAM           3,932       653      16.6%          4,372        746      17.1%         3,928       661      16.8%
                         ------     -----                    ------      -----                   ------     -----
GMAP
   Australia                808       157      19.5%            724        128      17.7%           651       131      20.1%
   Other Asia and
     Pacific             10,068       286       2.8%         12,564        447       3.6%        13,081       494       3.8%
                         ------     -----                    ------      -----                   ------     -----
   Total GMAP            10,876       443       4.1%         13,288        575       4.3%        13,732       625       4.6%
                         ------     -----                    ------      -----                   ------     -----

Total Worldwide          52,017     8,165      15.7%         53,178      8,514      16.0%        51,531     8,338      16.2%
                         ======     =====                    ======      =====                   ======     =====

</TABLE>

                                     Years Ended December 31,
                                     ------------------------
                                1998           1997            1996
                                ----           ----            ----
                                         (Units in Thousands)
Wholesale Sales

GMNA
  Cars                         2,731          3,095            2,913
  Trucks                       2,340          2,454            2,239
                               -----          -----            ----- 
    Total GMNA                 5,071          5,549            5,152
                               -----          -----            -----
GME
  Cars                         1,882          1,708            1,673
  Trucks                         125            142              122
                              ------         ------           ------
    Total GME                  2,007          1,850            1,795
                               -----          -----            -----
GMLAAM
  Cars                           404            495              459
  Trucks                         248            290              244
                                 ---            ---              ---
    Total GMLAAM                 652            785              703
                                 ---            ---              ---
GMAP
  Cars                           202            176              199
  Trucks                         217            416              414
                                 ---            ---              ---
    Total GMAP                   419            592              613
                                 ---            ---              ---

Total Worldwide                8,149          8,776            8,263
                               =====          =====            =====






                                    - 5 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMA Financial Review

   Including  $228 million and $3.0  billion of  after-tax  charges for 1998 and
1997, respectively,  related to the competitiveness studies (see Competitiveness
Studies),  GMA's  income was $1.6  billion  and $449  million for 1998 and 1997,
respectively.  Excluding the competitiveness  studies charges,  GMA's income was
$1.9  billion  or 1.5% of  manufactured  products  sales and  revenues  and $3.5
billion or 2.6% of  manufactured  products sales and revenues for 1998 and 1997,
respectively. Income was $2.3 billion or 1.8% of manufactured products sales and
revenues  in 1996.  The  decrease  in 1998  income  was  primarily  due to lower
production  volumes at GMNA  associated with the work stoppages at two component
plants in  Flint,  Michigan,  as  discussed  below,  and the  economic  downturn
throughout  Latin  America,  partially  offset by material and  structural  cost
savings.
   Members of United Auto Workers Locals 659 and 651 in Flint,  Michigan  ceased
production  at two component  plants on June 5 and June 11, 1998,  respectively.
Work  stoppages at both  facilities  were resolved July 28, 1998 when  tentative
agreements  were reached.  Both agreements were ratified by the rank and file on
July 29, 1998.  Operations began to accelerate to normal  production levels July
30, 1998. These work stoppages had an aggregate  unfavorable after-tax impact of
approximately  $1.5  billion,  or $2.26 per share of GM $1-2/3 par value  common
stock during 1998 that  resulted from a loss of  approximately  371,000 units of
production.
   The increase in 1997 income compared to 1996  (excluding the  competitiveness
studies charges) was primarily due to higher wholesale sales volumes,  continued
improvement  in the  profitability  of new  vehicles,  and  lower  material  and
engineering  costs.  These  factors  were  partially  offset  by  higher  retail
incentives,  increased  commercial  spending  to support  the  numerous  vehicle
launches,  and the unfavorable  impact of approximately  $240 million  after-tax
related to work stoppage production losses in 1997.
   Manufactured products sales and revenues for 1998 were $125.7 billion,  which
represented  a decrease of $8.4  billion  compared  with 1997.  The decrease was
largely  due to a lower  number  of  wholesale  units  sold as a  result  of the
previously  mentioned work stoppages and the economic downturn  throughout Latin
America.  Manufactured products sales and revenues for 1997 were $134.1 billion,
which   represented  an  increase  of  $6.5  billion  compared  with  1996.  The
improvement  was  primarily  due to a 513,000 unit  increase in wholesale  sales
volumes.
   GMA reported 1998 pre-tax  income of $2.6 billion  compared with $279 million
and $2.6 billion for 1997 and 1996, respectively. Excluding the $224 million and
$4.7  billion  pre-tax  impact of the  competitiveness  studies  charges,  GMA's
pre-tax   income  was  $2.8   billion  and  $5.0  billion  for  1998  and  1997,
respectively. The decrease in 1998 pre-tax income (excluding the competitiveness
studies  charges)  was  primarily  due to the  impact of lower  wholesale  sales
resulting  from the  previously  mentioned  work  stoppages  and  higher  retail
incentives,  partially offset by material,  engineering and  manufacturing  cost
improvements.  The increase in 1997 pre-tax  income was  primarily due to higher
wholesale  sales  volumes,  continued  improvement in the  profitability  of new
vehicles, and lower material and engineering costs.
   GMA's 1998 worldwide market share decreased to 15.7%, compared with 16.0% and
16.2% in 1997 and 1996, respectively. The decrease in market share was primarily
due to dealer  inventory  shortages due to the above mentioned work stoppages at
GMNA.  GMNA's 1998 market share was 28.9% compared with 30.8% and 31.0% for 1997
and 1996, respectively.
   GMNA  reported  income of $1.6 billion for 1998  compared  with a loss of $12
million and income of $819  million for 1997 and 1996,  respectively.  Excluding
the  competitiveness  studies  charges,  GMNA's income was $1.7 billion and $2.4
billion  for 1998 and  1997,  respectively.  The  decrease  in  income  for 1998
compared to 1997(excluding  the  competitiveness  studies charges) was primarily
due to the  previously  discussed  work  stoppages,  minimized  by  strong  cost
performance which more than offset price reductions driven by competitive market
pressures. The 1998 cost performance resulted from quality initiatives, material
performance  and  reduced  structural  cost.  The  increase  in income  for 1997
compared to 1996 (excluding the  competitiveness  studies charges) was primarily
due to a 397,000 unit increase in wholesale sales volumes, continued improvement
in the profitability of new vehicles,  and lower material and engineering costs.
These  factors were  partially  offset by higher  retail  incentives,  increased
commercial  spending to support the numerous vehicle  launches in progress,  and
the unfavorable impact of the work stoppages.
   GME  reported  income of $419  million for 1998  compared  with a loss of $17
million and income of $778  million for 1997 and 1996,  respectively.  Excluding
the  competitiveness  studies  charge,  GME's  income was $471 million for 1997.
GME's results also included an after-tax  charge in 1998 of $44 million  related
to work schedule  modifications  at Opel Belgium and after-tax  gains in 1997 of
$103  million  related  to the sale of GME's  interest  in Avis  Europe  and $55
million related to a settlement  agreement with Volkswagen A.G.  Excluding these
items,  GME's  income  was $463  million  and $313  million  for 1998 and  1997,
respectively.  The  increase  in 1998  adjusted  earnings  compared  to 1997 was
primarily due to savings on material  costs and policy & warranty  spending,  as
well as lower equity losses from Saab  Automobile A.B.  (Saab).  The decrease in
1997  adjusted  earnings  compared to 1996 was primarily due to higher sales and
marketing costs under intensely competitive market conditions,  and lower equity
earnings  from  Saab  related  to the  launch  of the new 9-5  model.  The  1996
Restructuring  Agreement  between GM and Saab's  other  owners  (Investor  A.B.)
includes certain provisions and options which may






                                    - 6 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMA Financial Review (concluded)

impact the relative ownership  interests of the parties involved.  The agreement
gives GM and Adam  Opel the  right to  purchase  up to 100% of  Investor  A.B.'s
interest in Saab during 1999 and 2000. Investor A.B. has the right to sell up to
50% of its present  holdings in Saab to GM and Adam Opel in 2000.  GM  currently
maintains a 50% ownership interest in Saab.
   GMLAAM  reported a loss of $175 million for 1998 compared with income of $667
million and $642 million for 1997 and 1996,  respectively.  The decrease in 1998
earnings compared to 1997 was primarily due to the economic downturn  throughout
Latin  America,  $51  million  of  after-tax  charges  in  1998  related  to the
competitiveness  studies,  and higher  incentive  costs.  The  increase  in 1997
earnings  compared to 1996 was primarily due to an increase in wholesale  sales.
The  financial  outlook  for  GMLAAM is  uncertain  for 1999 due to the  ongoing
economic crisis in Latin America.  In 1998, GMLAAM reduced  employment levels by
approximately  21%,  in an  effort  to  resize  the  operations  to the  current
conditions.  An additional  reduction  should be accomplished in 1999 by further
significant schedule adjustments. Capital spending has also been greatly reduced
to conserve cash in the region.
   GMAP  reported a loss of $243  million in 1998  compared  with a loss of $172
million and income of $110  million for 1997 and 1996,  respectively.  Excluding
the  competitiveness  studies  charges,  GMAP's  losses were $146 million and $2
million for 1998 and 1997, respectively. Higher losses for 1998 compared to 1997
were primarily attributable to decreased equity earnings at Isuzu resulting from
a write down of investments  due to the economic  downturn in Asia and continued
spending  associated with GMAP's growth strategy.  The decrease in 1997 earnings
compared to 1996 was due to increased  spending  associated  with GMAP's  growth
strategy and the beginning of the economic downturn in Asia.
   GMA's  effective  income tax (credit)  rate for 1998 was 34.8%  compared with
(53.0)%  and 13.6% for 1997 and 1996,  respectively.  Excluding  the  previously
mentioned  competitiveness  studies charges,  the effective income tax rates for
1998 and 1997 were 34.5% and 32.3%, respectively. These adjusted rates indicated
a return to a more  normalized  level.  The lower  1996 tax rate  resulted  from
research  and  experimentation   credits  in  the  United  States,  a  favorable
resolution  of items  related  to GM's  1995 tax  return,  and a  favorable  tax
position in Mexico.










































                                    - 7 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Hughes Financial Highlights

                                              Years Ended December 31,
                                              ------------------------
                                           1998        1997(1)       1996(1)
                                           ----        ----          ----
                                            (Dollars in Millions Except Per
Share Amounts)

Revenues                                  $5,964        $5,128       $4,009
                                           -----         -----        -----
Pre-tax income                               310           734          257
Income tax (benefit) expense                 (45)          237          105
Minority interests                            24            25           53
Losses in nonconsolidated associates        (128)          (72)         (42)
                                             ---         -----        -----
    Net income                              $251          $450         $163
                                             ===           ===          ===

   Earnings used for computation of Available
    Separate Consolidated Net Income (2)    $272          $471         $184

   Earnings per share attributable
    to Class H common stock (3)            $0.68         $1.18        $0.46

------------

(1)The 1997 and 1996  amounts  relate only to the  telecommunications  and space
   business  of former  Hughes to reflect  the  changes  to GM's  organizational
   structure  resulting from the Hughes  Transactions which occurred in December
   1997. See further discussion of Hughes Transactions below.
(2)Excludes  amortization of GM purchase  accounting  adjustments of $21 million
   in each of the years related to GM's  acquisition of Hughes Aircraft  Company
   (HAC) in 1985.
(3)For 1997 and 1996,  earnings per share  attributable  to Class H common stock
   are presented on a pro forma basis.  Prior to the Hughes  Transactions,  such
   amounts were calculated based on the financial  performance of former Hughes.
   Since  the  financial  highlights  for  1997  and  1996  relate  only  to the
   telecommunications  and space business of former Hughes,  they do not reflect
   the earnings per share  attributable  to the former Class H common stock on a
   historical  basis.  The  pro  forma  presentation,  therefore,  presents  the
   financial  results  which would have been achieved for 1997 and 1996 relative
   to  the  Class  H  common  stock  based  solely  on  the  performance  of the
   telecommunications  and space business of former Hughes. See Hughes Financial
   Review for further discussion.

Hughes Financial Review

   On December 17, 1997, GM and former Hughes completed a series of transactions
(Hughes  Transactions) that were designed to address strategic challenges facing
the three  principal  businesses  of former  Hughes  (consisting  of the defense
electronics,   automotive   electronics   and   telecommunications   and   space
businesses).  The Hughes  Transactions  included  the  tax-free  spin-off of the
defense  electronics  business of former Hughes  (Hughes  Defense) to holders of
GM's  $1-2/3 par value and Class H common  stocks,  the  transfer  of Delco from
former Hughes to Delphi, and the recapitalization of Class H common stock into a
new GM tracking  stock,  Class H common  stock,  that is linked to the remaining
telecommunications  and space business of Hughes.  The Hughes  Transactions were
followed  immediately by the merger of Hughes Defense with Raytheon Company. The
1997 and 1996 amounts presented for Hughes relate only to the telecommunications
and space businesses of former Hughes.
   Revenues  increased  to $6.0 billion in 1998,  compared  with $5.1 billion in
1997 and $4.0  billion in 1996.  The 1998  revenue  growth was  propelled  by an
increase  in the  DIRECTV(R)  businesses  due to strong  subscriber  growth  and
average monthly revenues per subscriber,  as well as low subscriber churn rates;
an  increase  at  PanAmSat  primarily  from the May  1997  PanAmSat  merger  and
increased  operating  lease  revenues  for  video,  data  and   Internet-related
services;  higher  commercial  satellite  sales; and higher sales of DIRECTV(TM)
receiver  equipment.  The 1997  increase  was due  primarily  to strong  DIRECTV
subscriber growth,  higher sales of commercial  satellites and completion of the
PanAmSat merger.
   Operating profit,  excluding  amortization of purchase accounting adjustments
related to GM's  acquisition of HAC, was $270 million in 1998 compared with $306
million  and  $210  million  in 1997  and  1996,  respectively.  Full-year  1998
operating  profit  margin on the same basis was 4.5%  compared with 6.0% in 1997
and 5.2% in 1996.  The lower 1998 operating  profit and operating  profit margin
were  principally  a result of lower  sales of  wireless  telephone  systems and
private business  networks in the Asia Pacific region, as well as provisions for
estimated losses associated with uncollectible amounts due from certain wireless
customers  at Hughes  Network  Systems.  These were  offset in part by the lower
operating  losses at domestic  DIRECTV and higher  operating profit at PanAmSat.
The increase in 1997  operating  profit and  operating  profit  margin  resulted
primarily  from the  completion of the PanAmSat  merger,  reduced  losses in the
DIRECTV business and higher commercial satellite sales.




                                    - 8 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Hughes Financial Review (concluded)

   Pre-tax income was $310 million in 1998,  compared with $734 million and $257
million in 1997 and 1996, respectively.  The decrease in 1998 primarily resulted
from the 1997 $490  million  pre-tax  gain  recognized  in  connection  with the
PanAmSat  merger in 1997,  goodwill  amortization  associated  with the PanAmSat
merger and a  provision  for  uncollectible  amounts due from  certain  wireless
customers,  offset by a decrease in interest expense and an increase in interest
income. The increase in 1997 of $477 million from 1996 reflects the $490 million
pre-tax gain discussed  above,  the completion of the PanAmSat  merger,  reduced
losses in the DIRECTV business and higher commercial  satellite sales.  Nineteen
ninety-six  included the $120 million  pre-tax gain  recognized from the sale of
2.5% of DIRECTV to AT&T.
   The effective  income tax rate for 1998 was (14.5)%,  compared with 32.3% and
40.9% in 1997 and 1996,  respectively.  The  effective  income  tax rate in 1998
benefited  from the  favorable  adjustment  relating  to an  agreement  with the
Internal Revenue Service regarding the treatment of research and experimentation
costs for the years 1983 through 1995. The 1997 decrease in the effective income
tax rate was due  primarily  to an  increase  in  research  and  experimentation
credits and the favorable resolution of certain tax contingencies.
   Excluding  amortization of purchase  accounting  adjustments  related to GM's
acquisition of HAC, Hughes' earnings used for computation of available  separate
consolidated net income for 1998 was $272 million compared with $471 million and
$184 million in 1997 and 1996, respectively.
   In May 1998,  Hughes  purchased  an  additional  9.5%  interest in  PanAmSat,
increasing Hughes' ownership interest in PanAmSat to 81.0%.
   In October 1998,  Hughes agreed to acquire,  pending  regulatory  approval in
Mexico, an additional ownership interest in Grupo Galaxy Mexicana,  S.A. de C.V.
(GGM),  a Galaxy Latin America,  LCC (GLA) local  operating  company  located in
Mexico,  from Grupo MVS,  S.A. de C.V.  (MVS).  Hughes'  equity  ownership  will
represent 49.0% of the voting equity and all of the non-voting equity of GGM. As
part of the  transaction,  Hughes acquired from MVS an additional 10.0% interest
in GLA,  increasing  its  ownership  interest to 70.0% as well as an  additional
19.8% interest in SurFin Ltd., increasing its ownership percentage to 59.1%.
   In December  1998,  Hughes agreed to acquire all of the  outstanding  capital
stock of  United  States  Satellite  Broadcasting  Company,  Inc.  (USSB).  USSB
provides  direct-to-home  premium  satellite  programming  in  conjunction  with
DIRECTV's basic programming service. USSB launched its service in June 1994 and,
as of December 31, 1998, had more than two million subscribers  nationwide.  The
acquisition  will be accounted for using the purchase method of accounting.  The
purchase  price,  consisting  of cash  and GM  Class  H  common  stock,  will be
determined at closing based upon an agreed-upon formula and will not exceed $1.6
billion  in  the  aggregate.  Subject  to  certain  limitations  in  the  merger
agreement, USSB shareholders will be entitled to elect to receive cash or shares
of GM Class H common  stock.  The amount of cash to be paid in the merger cannot
be less than 30% or greater than 50% of the  aggregate  purchase  price with the
remaining consideration consisting of GM Class H common stock. The merger, which
is  subject  to  USSB  shareholder  approval  and  the  receipt  of  appropriate
regulatory approval, is expected to close in early to mid-1999.
   In January 1999, Hughes agreed to acquire  Primestar,  Inc.'s (Primestar) 2.3
million-subscriber   medium-power   direct-to-home   business.   In  a   related
transaction,  Hughes also agreed to acquire the high-power  satellite assets and
direct  broadcast  satellite (DBS) orbital  frequencies of Tempo, a wholly-owned
subsidiary  of TCI  Satellite  Entertainment,  Inc. The  Primestar  transaction,
pending regulatory and Primestar lender approval,  is expected to close in early
to mid-1999. The Tempo transaction,  pending regulatory approval, is expected to
close in mid to late-1999.























                                    - 9 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Financing and Insurance Operations
----------------------------------

  Highlights of financial performance by GM's Financing and Insurance Operations
business were as follows for the years ended December 31, (in millions):

                                                 1998        1997        1996
                                                 ----        ----        ----
Financing revenues
GMAC                                          $12,731     $12,577     $12,644
Other                                             854         185          30
                                             --------    --------   ---------
  Total                                       $13,585     $12,762     $12,674
                                              =======     =======     =======

Net income
GMAC                                           $1,325      $1,301      $1,240
Other                                              97          17           1
                                              -------     -------    --------
  Total                                        $1,422      $1,318      $1,241
                                               ======      ======      ======


GMAC Financial Highlights

                                                    Years Ended December 31,
                                                    ------------------------
                                                 1998        1997        1996
                                                 ----        ----        ----
                                                      (Dollars in Millions)
Financing revenues
  Retail and lease financing                   $3,869      $3,571      $3,822
  Operating leases                              7,233       7,260       7,215
  Wholesale and term loans                      1,629       1,746       1,607
                                                -----       -----       -----
    Total financing revenues                   12,731      12,577      12,644
Interest and discount                           5,787       5,256       4,938
Depreciation on operating leases                4,693       4,677       4,627
                                                -----       -----       -----
    Net financing revenue                       2,251       2,644       3,079
Mortgage revenue                                2,030       1,499         944
Insurance premiums earned                       1,859       1,360       1,158
Other income                                    1,295       1,159       1,228
                                                -----       -----       -----
    Net financing revenue and other             7,435       6,662       6,409
Expenses                                        5,498       4,448       4,332
                                                -----       -----       -----
Pre-tax income                                  1,937       2,214       2,077
Income tax expense                                612         913         837
                                               ------      ------      ------
    Net income                                 $1,325      $1,301      $1,240
                                                =====       =====       =====

Net income from automotive financing operations  $984        $910        $946
Net income from mortgage operations               115         167         102
Net income from insurance operations              226         224         192
                                               ------      ------      ------
    Net income                                 $1,325      $1,301      $1,240
                                                =====       =====       =====

GMAC Financial Review

   GMAC's 1998  consolidated  net income increased 2% over 1997 to $1.3 billion.
Net income from automotive financing operations totaled $984 million, up 8% from
1997. Earnings were higher due to retail asset growth, reduced credit losses and
a lower  effective  income  tax rate,  partially  offset  by lower net  interest
margins and lower wholesale volume. Net income from insurance operations totaled
$226 million,  up from the $224 million earned in 1997. Net income from mortgage
operations totaled $115 million, down from $167 million earned in 1997. Earnings
were lower primarily as a result of reduced  mortgage asset values due to higher
prepayment levels.
   During 1998,  GMAC financed 41.8% of new GM vehicle retail  deliveries in the
United  States,  up from  33.1% and 28.4% in 1997 and  1996,  respectively.  The
improvements  since 1996  primarily  reflect higher  volumes  generated  through
special  rate  financing  and lease  incentive  programs  sponsored  by GM. This
improvement was achieved amid continued  competitive pressures in the automotive
financing marketplace.










                                    - 10 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMAC Financial Review (concluded)

    GMAC's automotive  financing revenue totaled $12.7 billion in 1998, compared
with $12.6 billion for both 1997 and 1996.  Higher retail financing  revenues in
1998 were partially offset by a decline in wholesale revenues,  principally from
the reduction in average  wholesale  receivable  balances related to the GM work
stoppages.
   GMAC's  worldwide cost of borrowing  decreased to 5.99%,  compared with 6.30%
and 6.57% in 1997 and 1996,  respectively.  The cost of borrowings in the United
States  was  5.89%  in 1998,  down  from  6.39%  and  6.51%  in 1997  and  1996,
respectively.  The lower average borrowing costs since 1996 are largely a result
of a decrease in U.S.  interest rates and a greater  proportion of floating rate
debt compared to fixed rate debt.
   Net automotive  financing revenue combined with mortgage  revenue,  insurance
premiums, and other income increased to $7.4 billion, compared with $6.7 billion
and $6.4 billion in 1997 and 1996, respectively.  The increases in 1998 and 1997
are primarily due to results from mortgage and insurance  operations,  partially
offset by reduced net automotive financing margins.
   Expenses  increased  by $1.1  billion  and $116  million  in 1998  and  1997,
respectively.  The increases  during 1998 and 1997 were  primarily due to higher
costs for salaries and benefits, increased insurance losses, and other operating
charges incidental to expanding mortgage and insurance business activities.
   GMAC's effective  income tax rate for 1998 was 31.6%,  compared with 41.2% in
1997 and 40.3% in 1996. The favorable change in 1998 was primarily  attributable
to lower  U.S.  and  foreign  taxes  assessed  on  foreign  source  income and a
favorable change  resulting from periodic  assessments of state and local income
tax  accruals.  The  unfavorable  change in 1997 was primarily  attributable  to
increases  in accruals  from prior years  based on  periodic  assessment  of the
adequacy of such accruals and higher state and local income taxes.

Competitiveness Studies

    The global automotive industry continues to be increasingly  competitive and
is presently undergoing significant  restructuring and consolidation activities.
All of the major industry participants are continuing to increase their focus on
efficiency and cost improvements,  while excess capacity led to continuing price
pressures.  As a result,  GMNA, GME, GMLAAM,  and GMAP initiated studies in 1997
concerning the long-term  competitiveness of all facets of their businesses.  As
market conditions continued to warrant such review, the competitiveness  studies
were again completed in 1998 in conjunction  with the annual  business  planning
cycle. Additional information regarding the competitiveness studies is contained
in Note 2 to the GM consolidated financial statements as filed on April 15, 1999
on a Form 8-K dated April 12, 1999.
   Based on the results of these  competitiveness  studies,  GM recorded pre-tax
charges  against income  totaling $224 million ($228 million after tax, or $0.35
per  share of $1-2/3  par value  common  stock) in 1998 and $5.0  billion  ($3.1
billion after-tax, or $4.34 per share of $1-2/3 par value common stock) in 1997.
   In 1998,  the pre-tax  charges  were  comprised  of $105 million ($80 million
after-tax)  for GMNA, $82 million ($51 million  after-tax)  for GMLAAM,  and $37
million ($97 million after-tax) for GMAP. Overall,  these charges had the effect
of  increasing  1998  cost of sales,  depreciation  and  amortization  and other
expenses by $92 million, $67 million and $65 million, respectively. In 1997, the
pre-tax  charges were  comprised of $3.8 billion  ($2.4  billion  after tax) for
GMNA, $848 million ($488 million  after-tax) for GME, $174 million ($170 million
after-tax) for GMAP and $205 million ($128 million after-tax) for GM Automotive,
Electronics and Other Operations' Other segment.  These charges reduced 1997 net
sales and revenues by $548 million and increased cost of sales, depreciation and
amortization,  and other expenses by $1.4 billion, $3.0 billion and $72 million,
respectively.  Accruals  related to capacity  reductions  and expenses that were
part of the 1997  charges  that still  remain as of December 31, 1998 total $1.1
billion.  Going forward,  GM's future cash requirements relating to the 1998 and
1997 charges are expected to total approximately $1.3 billion over the next five
years, with over 70% evenly expended over the first three years.
   The  competitiveness  studies charges  included  amounts for  underperforming
assets,  including both vehicle and component  manufacturing assets, pursuant to
GM's policy for the valuation of long-lived assets.  Future investments relating
to underperforming product lines will be expensed.  Charges also include amounts
for voluntary employee separation  programs,  recorded when the employee accepts
the offer in accordance with GM's policy for such programs.
   GM will  continue  to  monitor  the  competitiveness  of all  aspects  of its
businesses and further  competitiveness  studies will be undertaken  when and as
market conditions warrant.









                                    - 11 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Year 2000

   Many computerized  systems and microprocessors that are embedded in a variety
of  products  either  made  or used by GM have  the  potential  for  operational
problems  if they lack the  ability to handle the  transition  to the Year 2000.
Because  this  issue has the  potential  to cause  disruption  of GM's  business
operations,  GM,  including  Delphi,  has  developed a  comprehensive  worldwide
program to identify and remediate  potential  Year 2000 problems in its business
information   systems  and  other  systems   embedded  in  its  engineering  and
manufacturing operations. Additionally, GM has initiated communications and site
assessments with its suppliers,  its dealers and other third parties in order to
assess and reduce the risk that GM's operations  could be adversely  affected by
the failure of these third parties to adequately address the Year 2000 issue.
   One of GM's first priorities was the analysis of  microprocessors  used in GM
passenger cars and trucks.  This review  included all current and planned models
as well as the  electronics in older cars and trucks  produced during the period
of approximately  the last 15 years. GM began installing  microchips  capable of
processing date  information  approximately 15 years ago. Most of the processors
reviewed have no date-related  functionality,  and accordingly have no Year 2000
issues.  Of the vehicles with  processors that perform  date-related  functions,
none have any Year 2000 issues.
   GM's Year 2000 program  teams are  responsible  for  remediating  all of GM's
information technology and embedded systems.  Information technology principally
consists of business  information  systems  (such as mainframe  and other shared
computers and associated business application software) and infrastructure (such
as personal computers, operating systems, networks and devices like switches and
routers).  Embedded systems include  microprocessors  used in factory automation
and in systems such as elevators,  security and facility  management.  GM's Year
2000 program includes assessment and remediation services provided by Electronic
Data Systems Corporation (EDS) pursuant to a Master Service Agreement with GM.

   The Year 2000 program is being implemented in seven phases, some of which are
being conducted concurrently:

    Inventory --  identification  and  validation of an inventory of all systems
    that could be affected by the Year 2000 issue. The inventory phase commenced
    in  earnest  in  1996  and is  substantially  complete.  It  has  identified
    approximately  7,600  business  information  systems  and about 1.7  million
    infrastructure items and embedded systems.

    Assessment  -- initial  testing,  code  scanning,  and supplier  contacts to
    determine  whether  remediation is needed and developing a remediation plan,
    if   applicable.   The  assessment  of  business   information   systems  is
    substantially  complete and included a determination  that about one quarter
    of such systems  should be regarded as "critical"  based on criteria such as
    the  potential for business  disruption.  The  assessment of  infrastructure
    items and embedded systems was substantially completed by the end of 1998.

    Remediation  -- design and  execution  of a  remediation  plan,  followed by
    testing for  adherence to the design.  GM has  substantially  completed  the
    remediation  of its critical  and  non-critical  systems.  A small number of
    systems will be  remediated  or replaced in 1999.  Unimportant  systems have
    been and will continue to be removed from GM's Year 2000  inventory and will
    not be  remediated.  GM believes that it will meet its targets for Year 2000
    readiness.  In  the  normal  course  of  its  business  plans,  GM's  Delphi
    Automotive Systems unit is incrementally  implementing  enterprise  software
    that will  replace  and  thereby  eliminate  the need to  remediate  certain
    existing systems. Implementation of this software at several Delphi sites is
    scheduled for  completion in the first quarter of 1999,  and another  Delphi
    site implementation is not expected to be complete until July 1999.

    System  Test -- testing of  remediated  items to ensure  that they  function
    normally after being replaced in their original operating environment.  This
    phase is closely  related to the remediation  phase and follows  essentially
    the same schedule.

    Implementation  -- return of items to normal  operation  after  satisfactory
    performance  in system  testing.  This phase  follows  essentially  the same
    schedule as remediation and system testing.

    Readiness  Testing -- planning  for and testing of  integrated  systems in a
    Year 2000 ready  environment,  including  ongoing  auditing  and  follow-up.
    Readiness  testing is currently  underway.  This phase commenced  during the
    fourth  quarter of 1998 and is  expected  to be the major  focus of the Year
    2000 program throughout 1999.






                                    - 12 -
                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Year 2000 (continued)

    Contingency  Planning -- development  and execution of plans that narrow the
    focus on specific areas of significant concern and concentrate  resources to
    address them. GM currently  believes that the most  reasonably  likely worst
    case scenario is that there will be some  localized  disruptions  of systems
    that will affect individual business processes,  facilities or suppliers for
    a short time  rather than  systemic  or  long-term  problems  affecting  its
    business  operations as a whole.  GM  contingency  planning will continue to
    identify  systems or other aspects of GM's business or that of its suppliers
    that it believes would be most likely to experience  Year 2000 problems.  GM
    contingency  planning will also address those business operations in which a
    localized disruption could have the potential for causing a wider problem by
    interrupting  the flow of products,  materials or data to other  operations.
    Because there is uncertainty as to which  activities may be affected and the
    exact nature of the problems that may arise, GM's contingency  planning will
    focus on  minimizing  the scope and  duration of any  disruptions  by having
    sufficient  personnel,  inventory  and other  resources in place to permit a
    flexible,  real-time  response  to  specific  problems  as they may arise at
    individual  locations  around the  world.  Some of the  actions  that GM may
    consider include the deployment of emergency response teams on a regional or
    local basis and the development of plans for the allocation,  stockpiling or
    re-sourcing  of  components  and  materials  that  may  be  critical  to our
    continued   production.   Specific   contingency  plans  and  resources  for
    permitting  the  necessary  flexibility  of  response  are  expected  to  be
    identified and put into place commencing in mid-1999.

   GM's  communication with its suppliers is a focused element of the assessment
and  remediation  phases  described  above.  GM is a leading  participant  in an
industry trade  association,  the Automotive  Industry  Action Group,  which has
distributed Year 2000 compliance  questionnaires  as well as numerous  awareness
and assistance  mailings to about half of the 100,000 supplier sites that supply
GM throughout the world. Responses to these questionnaires, which were generally
sent to GM's  principal  suppliers,  have been  received  from about half of the
supplier sites to which they were sent. Many of the non-responding suppliers are
communicating  directly  with  GM on an  informal  basis.  Additionally,  GM has
initiated  its  own  review  of  suppliers  considered  to be  critical  to GM's
operations,  including  more  than  2,400  on-site  assessments  to date.  These
assessment  efforts  have  been  substantially  completed  with  respect  to the
critical supplier sites.  Based on its assessment  activity to date, GM believes
that a  substantial  majority of its suppliers  are making  acceptable  progress
toward Year 2000  readiness.  GM has  established  a program to provide  further
assistance  to  suppliers  that desire more input or that are  believed to be at
high risk of noncompliance as a result of the foregoing assessment efforts. This
supplier  assistance program currently includes providing  compliance  workshops
and   remediation   consultants   to  work  with  suppliers  on  developing  and
implementing their own remediation  programs.  GM's contingency planning efforts
described  above are also  expected to address any  critical  suppliers  that GM
identifies as being at high risk of encountering Year 2000 problems.
   GM is not  relying  entirely  on  the  receipt  of  written  assurances  from
suppliers  with  respect to their Year 2000  compliance.  GM is also  evaluating
certain  suppliers on a first-hand basis and seeking to enhance their likelihood
of full Year 2000  readiness  by  actively  assisting  them  with  training  and
consultation   regarding  Year  2000  remediation   projects.  GM  expects  that
information from our suppliers,  written  responses and interactions  with them,
will  provide  GM  with a  basis  for  further  contingency  planning  and  risk
management.
   GM also has a program to work with its independent dealers on their Year 2000
readiness.  This program includes distributing  materials that assist dealers in
designing and executing  their own assessment and  remediation  efforts.  GM has
also included Year 2000 compliance  criteria as part of its established  program
for certifying that third-party  business information systems properly interface
with other systems provided to dealers by GM.
   GM's direct Year 2000  program  cost is being  expensed as incurred  with the
exception  of  capitalizable   replacement  hardware  and,  beginning  in  1999,
internal-use  software.  Total incremental  spending by GM is not expected to be
material to the Corporation's operations, liquidity or capital resources.
   In addition to the work for which GM has direct financial responsibility, EDS
is  providing  Year  2000-related  services to GM, as required  under the Master
Service  Agreement.  These  services are being provided by EDS as part of normal
fixed price services and other on-going  payments to EDS. GM's current  forecast
is that its total direct  expenditures,  and the value of services  performed by
EDS attributable to GM's Year 2000 program,  will be between  approximately $710
million and $780 million for its entire Year 2000  program.  Of this amount,  GM
currently   expects  its  total  Year  2000   direct   spending  to  be  between
approximately $450 million and $520 million, with peak spending occurring in the
last quarter of 1998,  and early in 1999.  This total direct  spending  estimate
includes an  additional  payment of $75 million that GM has agreed to pay to EDS
at the end of the first  quarter of 2000 if systems  remediated by EDS under the
Master Service  Agreement do not cause a significant  business  disruption  that
results in a material  financial  loss to GM due to the millennium  change.  The
estimated  value of the services that EDS is required to provide to GM under the
Master Service  Agreement,  attributable  to work being  performed in connection
with GM's Year 2000 program, is approximately $335 million.





                                    - 13 -
                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Year 2000  (concluded)

   GM incurred  approximately  $40 million of Year 2000 expense  during 1997 and
approximately  $145  million in 1998,  of which,  $7 million and $40 million was
incurred on behalf of Delphi in 1997 and 1998, respectively. Also, the estimated
value of  services  provided  to GM by EDS during 1997 and 1998 under the Master
Service  Agreement that were  attributable  to work performed in connection with
GM's Year 2000 program,  was approximately $260 million.  Thus, the total direct
expenditures by GM, and value of Year 2000-related  services performed by EDS in
1997 and 1998, attributable to GM's Year 2000 program, amounted to approximately
$445 million.
   Despite the incremental Year 2000 spending expected to be incurred throughout
the  Corporation,  GM's  current  business  plan  projects  continued  declining
information  technology expenses.  GM's total Year 2000 costs noted above do not
include  information  technology projects that have been accelerated due to Year
2000, which are estimated to be approximately $30 million.
   In view of the  foregoing,  GM does  not  currently  anticipate  that it will
experience a significant disruption of its business as a result of the Year 2000
issue.  However,  there is still uncertainty about the broader scope of the Year
2000  issue as it may  affect GM and third  parties  that are  critical  to GM's
operations.  For example,  lack of readiness by electrical and water  utilities,
financial  institutions,  government  agencies  or other  providers  of  general
infrastructure could, in some geographic areas, pose significant  impediments to
GM's ability to carry on its normal operations in the area or areas so affected.
In the event that GM is unable to complete  its  remedial  actions as  described
above and is unable to implement  adequate  contingency  plans in the event that
problems  are  encountered,  there  could be a material  adverse  effect on GM's
business, results of operations or financial condition.
   The foregoing discussion describes the Year 2000 program being implemented by
GM,  including  Delphi,  and its  consolidated  subsidiaries  other than Hughes.
Information  about the Year 2000 efforts of Hughes can be found in Exhibit 99 to
GM's December 31, 1998 Form 10-K.
   Statements  made herein about the  implementation  of various  phases of GM's
Year 2000 program, the costs expected to be associated with that program and the
results that GM expects to achieve constitute  forward-looking  information.  As
noted  above,  there are many  uncertainties  involved  in the Year 2000  issue,
including the extent to which GM will be able to successfully  remediate systems
and adequately  provide for contingencies that may arise, as well as the broader
scope of the  Year  2000  issue  as it may  affect  third  parties  that are not
controlled by GM.  Accordingly,  the costs and results of GM's Year 2000 program
and the extent of any impact on GM's operations could vary materially from those
stated herein.

LIQUIDITY AND CAPITAL RESOURCES

Automotive, Electronics and Other Operations
--------------------------------------------

   Cash,  marketable  securities,  and $3.0  billion of assets of the  Voluntary
Employees'  Beneficiary   Association  (VEBA)  trust  invested  in  fixed-income
securities,  at December  31, 1998 totaled  $13.1  billion  compared  with $16.5
billion at December 31, 1997.  During 1997,  GM elected to pre-fund  part of its
other  postretirement   benefits  liability,   which  is  primarily  related  to
postretirement  health care expenses,  by creating a VEBA trust.  The total VEBA
assets,  which  approximated  $4.6 billion and $3.0 billion at December 31, 1998
and 1997, respectively,  had the effect of reducing GM's postretirement benefits
liability on the consolidated balance sheet.
   Net liquidity, calculated as cash and marketable securities less the total of
loans  payable and  long-term  debt,  was $1.8  billion at December  31, 1998, a
decrease of $5.3 billion from the prior year.  GM previously  indicated  that it
had a goal of  maintaining  $13.0 billion of cash and  marketable  securities in
order to continue  funding  product  development  programs  throughout  the next
downturn in the business  cycle.  This $13.0 billion target includes cash to pay
certain costs that were pre-funded in part by VEBA contributions.
   Long-term  debt was $7.1  billion  at  December  31,  1998,  an  increase  of
approximately  $1.4 billion from the prior year.  The ratio of long-term debt to
long-term debt and GM investment in Automotive, Electronics and Other Operations
was 58.1% and 38.6% at December  31, 1998 and 1997,  respectively.  The ratio of
long-term  debt and  short-term  loans  payable to the total of this debt and GM
investment was 61.8% and 41.3% at December 31, 1998 and 1997, respectively.
   GM believes it has sufficient  resources to meet anticipated future cash flow
requirements. In addition to cash flows from operations, GM and its subsidiaries
maintain  substantial  lines of  credit  with  various  financial  institutions.
Additional  information on GM's available credit facilities is contained in Note
10 to the GM consolidated  financial  statements as filed on April 15, 1999 on a
Form 8-K dated April 12, 1999.











                                    - 14 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Financing and Insurance Operations
----------------------------------

   GM's  Financing  and  Insurance  Operations  primarily  consist  of GMAC.  At
December 31, 1998,  GMAC owned assets and serviced  automotive  receivables  for
others  totaling  $138.7 billion  compared with $121.2 billion at year end 1997.
Earning  assets  totaled  $125.1 billion and $104.0 billion at December 31, 1998
and  1997,   respectively.   The  increase  in  earning   assets  was  primarily
attributable  to  increases  in  automotive  finance  receivables   outstanding,
operating  lease assets,  the investments in securities  portfolio,  real estate
mortgages  outstanding and  receivables  due from GM. Cash and cash  equivalents
totaled   $618  million  and  $759  million  at  December  31,  1998  and  1997,
respectively.
   GMAC's  consolidated  finance  receivables,  net of unearned income,  totaled
$72.1 billion and $60.0 billion at December 31, 1998 and 1997, respectively. The
higher  outstanding  balance  was  primarily  attributable  to  a  $7.5  billion
worldwide  increase in retail  receivables,  a $3.1 billion increase in U.S. and
European wholesale receivables and a $1.8 billion increase in term loans.
   GMAC's liquidity,  as well as its ability to profit from ongoing  acquisition
activity,  is in large part  dependent  on its  access to capital  and the costs
associated with raising funds in different  segments of the capital markets.  In
this regard,  GMAC regularly  accesses the short-,  medium-,  and long-term debt
markets,  principally  through  commercial  paper,  term notes, and underwritten
issuances.  GMAC's  borrowings  outstanding  at December 31, 1998 totaled $106.2
billion  compared with $86.9 billion at December 31, 1997.  GMAC's ratio of debt
to  stockholder's  equity at  December  31,  1998 was  10.8:1,  up from 9.9:1 at
December 31, 1997. The higher  year-to-year debt levels were principally used to
fund increased asset levels.  GMAC has continued to use an asset  securitization
program as an alternative  funding source and has sold finance  receivables that
it  continues  to service for a fee.  The  servicing  portfolio  of sold finance
receivables  totaled  $7.3  billion and $12.4  billion at December  31, 1998 and
1997, respectively.
   GMAC and its subsidiaries  maintain  substantial bank lines of credit,  which
totaled  $42.9  billion  and  $39.8  billion  at  December  31,  1998 and  1997,
respectively.  The unused portion of these credit lines totaled $33.2 billion at
December 31, 1998, which was $2.8 billion higher than at December 31, 1997.

Book Value Per Share

   Book value per share of $1-2/3 par value  common  stock  decreased  to $20.00
from $22.37 at December 31, 1998 and 1997, respectively. Book value per share of
Class H common  stock  decreased  to $12.00 at December  31, 1998 from $13.42 at
December 31, 1997. Book value per share was determined  based on the liquidation
rights of the various classes of common stock.

Stock Repurchases

   In  February  1998,  the GM Board of  Directors  (GM  Board)  approved a $4.0
billion stock repurchase program. Due to the previously mentioned work stoppages
during the second and third quarters of 1998, stock repurchases were temporarily
suspended as part of GM's cash conservation  initiatives.  The stock repurchases
were  reinstated  during  the  first  quarter  of 1999  and are  expected  to be
completed  by the  end of  1999.  Upon  completion  of the  $4.0  billion  stock
repurchase  program,  GM's stock  repurchases since January 1997 will total $9.0
billion.  In April 1999, GM redeemed the Series B Preference  Stock  pursuant to
its option to do so which commenced on January 1, 1999.

CASH FLOWS

Automotive, Electronics and Other Operations
--------------------------------------------

   Net cash provided by operating activities was $8.7 billion, $9.6 billion, and
$11.8 billion in 1998,  1997, and 1996,  respectively.  The decrease in net cash
provided by operating  activities in 1998 primarily  resulted from a decrease in
cash  generated  from  lower  net  income  primarily  due to the work  stoppages
previously discussed,  partially offset by lower VEBA contributions in 1998. The
decrease in net cash provided by operating activities in 1997 primarily resulted
from  a  $3.0  billion  VEBA  contribution  and  higher  pension  contributions,
partially  offset by an  increase  in cash  generated  from  higher net  income.
Depreciation  and  amortization  expenses  increased  by  $3.5  billion  in 1997
primarily due to the competitiveness studies charges.












                                    - 15 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Automotive, Electronics and Other Operations (concluded)
--------------------------------------------------------

   Net cash used in investing  activities was  relatively  unchanged at $7.0 and
$7.1  billion for 1998 and 1997,  respectively.  The increase in cash due to the
net change in investments in other marketable securities and operating leases in
1998 was offset by the proceeds from  borrowings of Hughes  Defense prior to the
spin-off  of  Hughes  Defense  in 1997.  Net cash used in  investing  activities
decreased  $1.7  billion in 1997 from $8.9  billion in 1996.  This  decrease was
primarily  due to GM's receipt of $4.0 billion in proceeds  from  borrowings  of
Hughes Defense,  partially  offset by a $1.7 billion  increase in investments in
companies,  net of cash acquired,  which primarily  related to the completion of
the merger of the  satellite  service  operations of former Hughes and PanAmSat.
These amounts were also offset by an intercompany  payment from EDS prior to its
separation in 1996 and lower dividends received from GMAC in 1997.
   Net cash used in financing  activities  was $2.8 billion,  $6.6 billion,  and
$1.3 billion in 1998, 1997 and 1996, respectively. The decrease in cash used for
financing activities in 1998 was primarily due to a $2.6 billion net increase in
loans  payable  and  long-term  debt  and a  decrease  in cash  used  for  stock
repurchases.  Net cash used in financing  activities  increased  $5.3 billion in
1997 compared to 1996. During 1997, GM used $3.8 billion to acquire 63.5 million
shares of $1-2/3 par value common stock. GM also used approximately $600 million
to  repurchase  shares of $1-2/3 par value  common  stock for  certain  employee
benefit plans during 1997. Also in 1997, net cash flows used in association with
changes in long-term debt increased by approximately  $1.8 billion compared with
1996 and reflected a combination  of refinancing  and retirement  using GM's new
commercial  paper  program  and cash  received  in  connection  with the  Hughes
Transactions.

Financing and Insurance Operations
----------------------------------

   Cash provided by operating  activities  during 1998 totaled $5.6 billion,  an
increase from the $4.0 billion and $4.2 billion  provided  during the comparable
1997 and 1996 periods,  respectively.  The  additional  operating  cash flow was
primarily the result of increased mortgage activity.
   Cash  used for  investing  activities  during  1998  totaled  $22.6  billion,
compared with $12.1 billion and $6.5 billion during the same periods in 1997 and
1996,  respectively.  Cash usage  increased  primarily  as a result of lower net
finance  receivable  activity  and a  decrease  in sales of  retail  receivables
proceeds.
   Cash  provided by financing  activities  during 1998 totaled  $17.7  billion,
compared  with $8.3  billion  and $2.6  billion of cash  provided  by  financing
activities during the comparable 1997 and 1996 periods, respectively. The change
is  primarily  the result of increases  in short- and  long-term  debt and lower
dividends paid to GM.

Dividends

   Dividends  may be paid on common  stocks only when, as and if declared by the
GM Board in its sole discretion.  GM's policy is to distribute  dividends on its
$1-2/3 par value common stock based on the outlook and  indicated  capital needs
of the  business.  In  January  1999,  the GM Board  declared a  quarterly  cash
dividend of $0.50 per share on $1-2/3 par value common stock,  payable March 10,
1999. The GM Board also declared quarterly  dividends on the Series B, Series D,
and  Series  G  Depositary  Shares  of  $0.57,  $0.495,  and  $0.57  per  share,
respectively,  payable May 1, 1999. With respect to Class H common stock,  which
was recapitalized on December 17, 1997, the GM Board determined that it will not
pay any cash  dividends at this time in order to allow the earnings of Hughes to
be retained for investment in its telecommunications and space businesses.

Health Care Expense and Other Postretirement Benefits

   The cost of  postretirement  medical,  dental,  vision,  and  life  insurance
benefits  provided to retirees and eligible  dependents  are  recognized  in the
consolidated  financial  statements during the period in which employees provide
services to GM. Costs for medical,  dental,  vision, and life insurance benefits
provided  to  employees   during   active   service  are  expensed  as  incurred
(pay-as-you-go).  The components of postretirement  benefits  expense,  the U.S.
health care cost, and cash  expenditures for GM's U.S.  operations are set forth
below (excluding cash expenditures for Hughes' and former Hughes' non-automotive
employees, but including GMAC).
     GM is  committed  to  reducing  the burden of  continuing  health care cost
increases.  During 1997, GM elected to pre-fund part of its other postretirement
benefits  liability by creating a VEBA trust to which it  contributed $3 billion
of its cash reserves.  In 1998, GM contributed an additional $1.7 billion to and
paid $375  million in  benefits  from the VEBA  trust.  The VEBA  assets had the
effect of reducing GM's  postretirement  benefits  liability on the consolidated
balance sheet.






                                    - 16 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Health Care Expense and Other Postretirement Benefits (concluded)

                                           Year Ended December 31, 1998
                                           ----------------------------
                                       Postretirement   Health    Pay-As-You-Go
                                          Benefits     Care Cost      Cost*
                                          --------     ---------      -----
                                                (Dollars in Millions)
GM U.S. operations health care
   Postretirement medical, dental, 
     and vision                           $2,829        $2,829          $ -
   Retired employees pay-as-you-go             -             -        2,012
   Active employees pay-as-you-go              -         1,717        1,717
                                           -----         -----        -----
      Total health care                    2,829        $4,546       $3,729
                                           -----
   Life insurance                            449
   Other subsidiaries - health care 
     and life insurance                      193
                                           -----
      Total postretirement benefits 
        expense                            3,471
   Less amounts allocated to discontinued
         operations                          966
                                           -----
      Postretirement benefits expense for
         continuing operations            $2,505
                                           =====

*  Pay-as-you-go  amounts for 1997 were $1.9 billion for retirees,  $1.7 billion
for active employees, and $3.6 billion in total.

     The master  separation  agreement between Delphi and GM provides in general
that GM will retain other postretirement benefit liabilities related to Delphi's
U.S. salaried employees retiring on or prior to January 1, 1999. The liabilities
related to Delphi's U.S. salaried active and inactive  employees  retiring after
January 1, 1999 will be assumed by Delphi.  Delphi's U.S. hourly  employees will
continue to participate in the  postretirement  plans  administered  by GM until
full  separation  from GM, and GM generally will retain  postretirement  benefit
obligations for U.S. hourly employees  retired on or before October 1, 1999. The
amount  of  postretirement   benefits  expense  allocated  to  Delphi  for  1998
approximates $1.0 billion.  Additional  information  related to employee benefit
arrangements affected by the Delphi separation can be found in Note 23 to the GM
consolidated financial statements as filed on April 15, 1999 on a Form 8-K dated
April 12, 1999.
   GM has disclosed in its  consolidated  financial  statements  certain amounts
associated with estimated future postretirement benefits other than pensions and
classified such amounts as  "accumulated  postretirement  benefit  obligations,"
"liabilities," or "obligations."  Notwithstanding  the recording of such amounts
and the use of these terms, GM does not admit or otherwise acknowledge that such
amounts or existing  postretirement  benefit  plans of GM (other than  pensions)
represent legally enforceable liabilities of GM.

GM Card

   GM sponsors a credit card program,  entitled the GM Card  program,  which was
introduced in the U.S. in September 1992 and subsequently in Canada,  Australia,
Brazil,  Mexico,  Chile and the United Kingdom.  A cardholder's  use of the card
generates  entitlements  to  rebates  that  can be used in  connection  with the
cardholder's purchase or lease of a new GM vehicle.
   As the sponsor of the GM Card program,  GM does not provide  consumer credit.
The program is used as a marketing tool to increase  product sales.  Independent
banks  issue the GM Card and are  responsible  for  evaluating,  extending,  and
funding credit to the cardholders, and are fully responsible for any credit card
losses with no recourse against GM.
   In the U.S., GM Card rebates accumulate at a rate equal to 5% of all spending
for goods or services  charged on the GM Card up to a maximum  rebate  amount of
$500 per year.  The rebates,  which  expire in 7 years,  may be applied over and
above all sales  allowances  in the  market at the time of vehicle  purchase  or
lease. GM is solely  responsible to cardholders  for rebates.  Provisions for GM
Card rebates are recorded as  reductions in revenue at the time of vehicle sale.
GM has the right to prospectively modify the plan.
   Rebates  redeemed  worldwide  during 1998,  1997, and 1996 were $705 million,
$656  million,  and $443 million,  respectively.  Cardholder  rebates  available
worldwide for future redemption when the cardholder purchases or leases a new GM
vehicle  amounted to $3.7  billion  and $3.5  billion  (net of deferred  program
income) at December 31, 1998 and 1997, respectively. GM anticipates that profits
from incremental  sales resulting from the GM Card program,  along with deferred
program income, will more than offset future rebate costs associated with the GM
Card.








                                    - 17 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Deferred Income Taxes

   At December 31, 1998, GM's consolidated balance sheet included a net deferred
tax asset of  approximately  $17.8  billion  related  to net  future  deductible
temporary  differences (see Note 6 to the GM consolidated  financial statements)
in the  United  States  of which  approximately  $13.8  billion  related  to the
obligation for postretirement  benefits other than pensions.  Realization of the
net deferred tax asset is dependent  upon  profitable  operations  in the United
States and future reversals of existing taxable temporary differences.  Although
realization  is not  assured,  GM believes  that it is more likely than not that
such benefits will be realized  through the reduction of future taxable  income.
Management has carefully considered various factors in assessing the probability
of realizing this deferred tax asset including:
   .  The  operating  results of GMNA over the most recent three year period and
      overall  financial  forecasts of book and taxable income for the 1999-2003
      period.  Further  improvements  are  expected  by  continuing  efforts  to
      maintain  GM's  competitiveness,  including  actions  relating to reducing
      material costs through global sourcing and increasing  efficiency  through
      lean manufacturing.
   .  Operating results of GMAC and Hughes which generated U.S. pre-tax
      income of approximately $1.8 billion, $3.3 billion, and $3.1 billion in
      1998, 1997, and 1996, respectively.
   .  The ability to utilize tax planning,  such as  capitalization  of research
      and experimentation  costs for tax purposes, so that GM does not have, and
      does not expect to  generate  in the near  future,  any  significant  U.S.
      federal tax net operating loss carryforwards.
   .  The extended period of time over which the tax assets can be utilized.
      Postretirement benefits become tax deductions over periods up to 50
      years.
   .  The fact that GM has never lost deferred federal tax assets due to the
      expiration of a U.S. net operating loss carryforward.
   Dividends  received  from  foreign  operations  for U.S.  federal  income tax
purposes totaled  approximately $3.1 billion,  $2.6 billion, and $1.0 billion in
1998, 1997, and 1996, respectively.

Pensions

   At December 31, 1998,  GM's total  worldwide  net unfunded  pension  position
increased  to $6.3  billion  ($1.2  billion  for the U.S.  automotive  qualified
hourly/salary  plans and $5.1 billion for all other plans  worldwide)  from $5.0
billion a year ago ($0.5 billion for the U.S. automotive qualified hourly/salary
plans and $4.5 billion for all other plans  worldwide).  The predominant  factor
contributing  to the  increase in the unfunded  position of the U.S.  automotive
qualified  hourly/salary plans was a 25 basis point decline in the discount rate
used to measure  the  pension  obligation  at the end of 1998  compared  to 1997
(6.75% and 7.00%,  respectively).  During  1998 and 1997,  GM  contributed  $1.1
billion  and $1.5  billion in cash,  respectively,  to its U.S.  hourly  pension
plans.
   On an economic basis, GM continues to maintain a fully-funded  status for its
U.S.  hourly and salaried  pension  plans as of December 31, 1998.  The economic
basis of measuring the U.S. hourly and salaried pension  liability  differs from
the Statement of Financial Accounting Standards (SFAS) No. 87 basis,  Employers'
Accounting  for  Pensions,  required by GAAP,  but GM believes it to be a better
measure of GM's ongoing  economic  exposure for pension  obligations and as such
uses this as a measure  to  determine  its funded  status.  The  economic  basis
discounts  pension  liabilities at the long-term  asset earnings rate assumption
(currently 10.0%) rather than at a variable, year-end market rate as required by
SFAS No. 87  (currently  6.75%).  In periods of low  interest  rates,  as in the
current market environment,  the SFAS No. 87 liability will generally exceed the
liability  calculated on an economic basis,  whereas in periods of high interest
rates  the  economic  basis  liability  will  generally  exceed  the SFAS No. 87
liability.
   The master separation agreement between Delphi and GM provides generally that
pension plan assets and liabilities related to Delphi's U.S. salaried active and
inactive  employees  retiring  after  January 1, 1999 will be assumed by Delphi.
Delphi has established  defined benefit pension plans for its salaried employees
under the same  terms  that  existed  for the GM plans as of  January  1,  1999.
Delphi's financial data classified as discontinued operations reflect the assets
and  liabilities  related to U.S.  salaried  employees  that  Delphi will assume
pursuant  to the master  separation  agreement,  and  exclude  employee  benefit
obligations  and  assets  related  to  salaried  employees  retired on or before
January 1, 1999.  Generally,  Delphi's U.S.  hourly  employees  will continue to
participate in the defined benefit pension plan for hourly workers  administered
by GM until full separation from GM.  Generally,  Delphi will assume the pension
obligations  for U.S.  hourly  employees who retire after October 1, 1999 and GM
will retain  pension  obligations  for U.S.  hourly  employees  who retire on or
before  October 1, 1999.  The amount of such  obligations  varies  depending  on
factors such as discount  rates,  asset returns,  contribution  levels and other
factors.  The  obligation  attributable  to Delphi  classified  as  discontinued
operations  was $2.1  billion and $1.7  billion at  December  31, 1998 and 1997,
respectively.  Additional  information related to employee benefit  arrangements
affected by the Delphi separation can be found in Note 23 to the GM consolidated
financial  statements  as filed on April 15,  1999 on a Form 8-K dated April 12,
1999.








                                    - 18 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Environmental Matters

   GM is subject to various laws relating to the  protection of the  environment
including laws regulating air emissions, water discharges, waste management, and
environmental  cleanup.  GM is also  in  various  stages  of  investigation  and
remediation for sites where contamination has been alleged.
   The liability  for worldwide  environmental  cleanup was  approximately  $500
million and $590 million at December 31, 1998 and 1997, respectively.  In future
periods,  new  laws  or  regulations,   advances  in  technologies,   additional
information  about the ultimate remedy  selected at new and existing sites,  and
GM's  share  of the  cost of  such  remedies  could  significantly  change  GM's
estimates.
   The process of estimating such liabilities is complex and dependent primarily
on the nature and extent of historical information and physical data relating to
a contaminated  site,  the  complexity of the site,  the  uncertainty as to what
remedy  and  technology  will be  required,  the  outcome  of  discussions  with
regulatory  agencies  and  other  potentially   responsible  parties  (PRPs)  at
multi-party sites, and the number and financial viability of other PRPs.
   In 1998,  1997,  and 1996,  GM expensed  $72 million,  $63  million,  and $68
million, respectively,  for environmental investigation,  remediation, and waste
management.   In  addition,   worldwide  capital   expenditures,   as  discussed
previously,  included $83 million,  $91 million,  and $99 million in 1998, 1997,
and 1996, respectively, for various environmental matters.

Euro Conversion

   On January 1, 1999,  eleven of fifteen member countries of the European Union
established fixed conversion rates between their existing currencies and adopted
the euro as their new common currency. The euro trades on currency exchanges and
the legacy currencies  remain legal tender in the participating  countries for a
transition  period until  January 1, 2002.  Beginning  on January 1, 2002,  euro
denominated  bills  and coins  will be  issued  and  legacy  currencies  will be
withdrawn from circulation.
   GM has  established  plans to assess and address the impact to GM as a result
of the euro  conversion.  The  introduction  of the euro on  January 1, 1999 has
increased the pace of price harmonization  throughout Europe. GM has developed a
comprehensive  program to identify,  analyze and  determine the best strategy to
address this price  harmonization.  GM is  analyzing  all aspects of its pricing
strategy to minimize any potential risk of this pricing harmonization.
   In addition, the Corporation has reviewed and has made required modifications
to applicable  information  technology  systems and  contracts  based on the new
currency.
   GM  believes  the  introduction  of the euro does not have any  material  tax
consequences,  and also believes it reduces its overall foreign exchange risk as
the number of currencies in which it transacts is now reduced.
   GM believes that the euro conversion will not have a material  adverse impact
on its financial position or results of operations.

Employment

Worldwide employment at December 31, (in thousands)
                                                 1998        1997       1996(1)
                                                 ----        ----       -------
  GMNA                                            226         237         245
  GME                                              84          79          79
  GMLAAM                                           24          27          23
  GMAP                                             10          10           9
  GMAC                                             24          21          18
  Hughes                                           15          14          12
  Other                                            13          10           8
                                                 ----        ----       -----
    Total employees                               396         398         394
                                                  ===         ===         ===


(1) Amounts  have been  adjusted to reflect  the changes to GM's  organizational
    structure  resulting from the  restructuring of former Hughes which occurred
    in December 1997. As such,  Delphi adjusted amounts include Delco and Hughes
    adjusted amounts exclude Delco and Hughes Defense.














                                    - 19 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

New Accounting Standards

   In the first  quarter of 1998,  the AICPA's  Accounting  Standards  Executive
Committee issued  Statement of Position (SOP) 98-1,  Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use. This SOP requires that
entities  capitalize certain  internal-use  software cost once specific criteria
are met.  Currently,  GM generally expenses the costs of developing or obtaining
internal-use software as incurred. GM will adopt SOP 98-1 on January 1, 1999, as
required. GM expects that under the new SOP,  approximately $260 million to $320
million in spending will be  capitalized  in 1999 that would have otherwise been
expensed.
   In the second  quarter of 1998,  the  Financial  Accounting  Standards  Board
issued Statement of Financial  Accounting  Standards (SFAS) No. 133,  Accounting
for  Derivative  Instruments  and Hedging  Activities.  SFAS No. 133 requires an
entity to recognize  all  derivatives  as either assets or  liabilitiies  in the
statement of financial  position and measure  those  instruments  at fair value.
Gains or losses resulting from changes in the values of those  derivatives would
be accounted for depending on the use of the derivative and whether it qualifies
for hedge  accounting.  GM plans to adopt SFAS No.  133 by  January 1, 2000,  as
required.  GM is  currently  assessing  the  impact  of this  Statement  on GM's
consolidated financial statements.

Forward-Looking Statements

   Following are the principal  important factors which may cause actual results
to differ materially from those expressed in forward-looking  statements made by
the managements of GM, Hughes and Delphi:

   . Changes in economic  conditions,  currency  exchange  rates,  or  political
     stability in the major markets  where the  corporation  procures  material,
     components,  and supplies for the  production of its principal  products or
     where its products are produced, distributed, or sold (i.e., North America,
     Europe,  Latin America and Asia-Pacific),  including the effects of current
     economic problems in Asia and political problems in the Far East.
   . Shortages  of  fuel  or  interruptions  in  transportation  systems,  labor
     strikes,  work stoppages,  or other interruptions to or difficulties in the
     employment of labor in the major markets  where the  corporation  purchases
     material,  components,  and supplies for the  production of its products or
     where its products are produced, distributed or sold.
   . Significant  changes in the  competitive  environment  in the major markets
     where the corporation  purchases material,  components and supplies for the
     production of its products or where its products are produced, distributed,
     or sold.
   . Changes  in  the  laws,  regulations,   policies  or  other  activities  of
     governments,  agencies  and similar  organizations  where such  actions may
     affect the production, licensing, distribution or sale of the corporation's
     products, the cost thereof or applicable tax rates.
   . The ability of the corporation to achieve reductions in cost and employment
     levels,  to  realize  production  efficiencies,  and to  implement  capital
     expenditures, all at the levels and times planned by management.
   . With respect to Hughes,  additional  risk factors  include:  the ability to
     achieve subscriber growth in its Direct-To-Home  businesses, the ability to
     sustain  technological  competitiveness,  the possible  failure or delay of
     planned satellite launches,  access to capital and financial flexibility in
     order  to take  advantage  of new  market  opportunities,  the  ability  to
     complete strategic acquisition of businesses and assets, and the ability to
     respond to  competitive  pressures and react quickly to other major changes
     in the marketplace.



                                 * * * * * *


















                                    - 20 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Quantitative and Qualitative Disclosures About Market Risk

   GM is exposed to market risk from changes in foreign currency exchange rates,
interest rates and certain  commodity and equity  security  prices.  In order to
manage  the risk  arising  from  these  exposures,  GM enters  into a variety of
foreign exchange, interest rate, and commodity forward contracts and options.
   A discussion  of GM's  accounting  policies  for  derivative  instruments  is
included  in Note 1 to the GM  consolidated  financial  statements  and  further
disclosure is provided in Notes 10, 11, and 12 to the GM consolidated  financial
statements.
   GM maintains risk management  control  systems to monitor  foreign  exchange,
interest rate,  commodity and equity price risks,  and related hedge  positions.
Positions  are  monitored  using a variety of  analytical  techniques  including
market value,  sensitivity  analysis,  and value-at-risk  models.  The following
analyses are based on  sensitivity  analysis  tests which assume  instantaneous,
parallel shifts in exchange rates, interest rate yield curves, and commodity and
equity prices.  For options and  instruments  with  non-linear  returns,  models
appropriate   to  the  instrument  are  utilized  to  determine  the  impact  of
sensitivity shifts.

Foreign Currency Exchange Rate Risk
   GM has foreign currency exposures related to buying,  selling,  and financing
in  currencies  other  than the  local  currencies  in which it  operates.  More
specifically,  GM is exposed to foreign  currency risk related to uncertainty to
which  future  earnings  or assets  and  liability  values  are  exposed  due to
operating cash flows and various  financial  instruments that are denominated in
foreign  currencies.  GM's most significant foreign currency exposures relate to
Canada, Mexico,  Western European countries (primarily Germany,  United Kingdom,
Spain, Italy, Belgium and France),  Australia,  Japan and Brazil. As of December
31, 1998 and 1997, the net fair value  liability of financial  instruments  with
exposure  to foreign  currency  risk was  approximately  $3.5  billion  and $1.9
billion,  respectively.  The  potential  loss in fair  value for such  financial
instruments  from a hypothetical  10% adverse change in quoted foreign  currency
exchange rates would be approximately $161 million and $190 million for 1998 and
1997, respectively.
   The model assumes a parallel shift in the foreign  currency  exchange  rates.
Exchange rates rarely move in the same  direction.  The assumption that exchange
rates change in a parallel fashion may overstate the impact of changing exchange
rates on assets and liabilities denominated in a foreign currency.

Interest Rate Risk
   GM is subject to market risk from exposure to changes in interest rates based
on its financing,  investing,  and cash  management  activities.  GM enters into
various  financial  instrument  transactions  to maintain  the desired  level of
exposure  to the risk of interest  rate  fluctuations  and to minimize  interest
expense. More specifically, General Motors Acceptance Corporation (GMAC) and its
affiliates  have also entered into  contracts to provide  commercial  and retail
financing,  retain  mortgage  servicing  rights,  and to retain  various  assets
related to mortgage  securitization.  Certain  exchange traded future and option
contracts,  interest rate caps and floors, along with various investments,  have
been entered into to reduce the interest  rate risk related to these  activities
and manage  potential  prepayment  activity  associated with mortgage  servicing
rights. The GMAC Mortgage Group (GMACMG) manages prepayment risk associated with
its  capitalized  mortgage  servicing  rights  with U.S.  Treasury  options  and
futures. Since the derivative instruments do not have identical  characteristics
to the underlying mortgage servicing rights, GM is exposed to basis risk. GMACMG
mitigates  this risk  through a  historical  review of value  change in  various
interest rate scenarios when establishing and maintaining its hedge program.  As
of December 31, 1998 and 1997,  the net fair value  liability  of all  financial
instruments  held for purposes other than trading with exposure to interest rate
risk was  approximately  $15.9  billion  and  $3.7  billion,  respectively.  The
potential  decrease in fair value  resulting  from a  hypothetical  10% shift in
interest rates would be approximately  $90 million and $214 million for 1998 and
1997,  respectively.  The net fair value asset of all financial instruments held
for trading purposes with exposure to interest rate risk was approximately  $3.2
billion and $2.1 billion for 1998 and 1997, respectively.  The potential loss in
fair value  resulting from a  hypothetical  10% shift in interest rates would be
approximately $84 million and $43 million for 1998 and 1997, respectively.
   The SEC disclosures on market risk require that all financial instruments, as
defined  by  Statement  of  Financial   Accounting  Standards  (SFAS)  No.  107,
Disclosures about Fair Value of Financial Instruments, should be included in the
quantitative  disclosure  calculation.  Operating  leases are not required to be
disclosed  by  SFAS  No.  107,  and  have  not  been  presented  as  part of the
sensitivity  analysis.   This  is  a  significant  limitation  to  the  analysis
presented.  While the sensitivity  analysis will show a fair market value change
for the debt which funds GM's operating lease portfolio,  a corresponding change
for GM's operating lease portfolio,  which had a book value of $37.1 billion and
$33.7 billion as of December 31, 1998 and 1997, respectively, was not considered
by the  model.  As a result,  the  overall  impact to the fair  market  value of
financial  instruments  from a  hypothetical  change  in  interest  rates may be
overstated.







                                    - 21 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Interest Rate Risk (concluded)
   There  are  certain   shortcomings   inherent  to  the  sensitivity  analyses
presented.  The model assumes interest rate changes are  instantaneous  parallel
shifts in the  yield  curve.  In  reality,  changes  are  rarely  instantaneous.
Although  certain assets and liabilities may have similar  maturities or periods
to repricing,  they may not react  correspondingly to changes in market interest
rates.  Also, the interest rates on certain types of assets and  liabilities may
fluctuate with changes in market interest  rates,  while interest rates on other
types of assets may lag behind changes in market rates.  Finance receivables are
less susceptible to prepayments when interest rates change, while prepayments on
many mortgage related  instruments are directly affected by a change in interest
rates.  As such,  GM's model does not  address  prepayment  risk for  automotive
related  finance  receivables,  but does consider  prepayment  risk for mortgage
related  instruments that are highly sensitive to prepayment risk.  However,  in
the event of a change in interest  rates,  actual loan  prepayments  may deviate
significantly from assumptions used in the model. Further,  certain assets, such
as adjustable rate loans, have features,  such as annual and lifetime caps, that
restrict  changing  the interest  rates both on a short-term  basis and over the
life of the asset.  Finally,  the ability of certain borrowers to make scheduled
payments on their adjustable rate loans may decrease in the event of an interest
rate increase.

Commodity Price Risk
   GM enters into  commodity  forward and option  contracts.  Such contracts are
executed to offset GM's  exposure to the  potential  change in prices mainly for
various  non-ferrous metals used in the manufacturing of automotive  components.
The net  fair  value  liability  of such  contracts,  excluding  the  underlying
exposures,  as of December 31, 1998 and 1997 was approximately  $200 million and
$42 million,  respectively.  The potential change in the fair value of commodity
forward and option contracts,  assuming a 10% change in the underlying commodity
price, would be approximately $203 million and $111 million at December 31, 1998
and 1997, respectively.  This amount excludes the offsetting impact of the price
risk inherent in the physical purchase of the underlying commodities.

Equity Price Risk
   GM holds  investments in various  available-for-sale  equity securities which
are subject to price risk.  The fair value of such  investments,  as of December
31, 1998 and 1997 was approximately $1.2 billion and $899 million, respectively.
The  potential  change in the fair  value of these  investments,  assuming a 10%
change in prices  would be  approximately  $121 million and $90 million for 1998
and 1997, respectively.

Forward-Looking Statements
   The above discussion and the estimated amounts generated from the sensitivity
analyses  referred to above  include  forward-looking  statements of market risk
which assume for analytical  purposes that certain adverse market conditions may
occur.   Actual  future  market  conditions  may  differ  materially  from  such
assumptions because the amounts noted previously are the result of analyses used
for  the  purpose  of  assessing  possible  risks  and the  mitigation  thereof.
Accordingly, the forward-looking statements should not be considered projections
by GM of future events or losses.


                                 * * * * * *
























                                    - 22 -


                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                            GENERAL MOTORS CORPORATION
                                            --------------------------
                                                    (Registrant)
Date    April 21, 1999
        -----------------
                                            By
                                            s/Peter R. Bible
                                            -------------------------------
                                            (Peter R. Bible,
                                             Chief Accounting Officer)


















































                                    - 23 -
[{"type": "8-K", "sequence": "1", "description": "MD&A FOR RESTATED FINANCIALS", "secsgml_size_bytes": 111474}]
{"company-data": {"conformed-name": "GENERAL MOTORS CORP", "cik": "0000040730", "assigned-sic": "3711", "irs-number": "380572515", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-00143", "film-number": "99597967"}, "business-address": {"street1": "100 RENAISSANCE CTR", "city": "DETROIT", "state": "MI", "zip": "48265-1000", "phone": "3135565000"}, "mail-address": {"street1": "3044 W GRAND BOULEVARD", "city": "DETROIT", "state": "MI", "zip": "48202-3091"}}
SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549-1004

                                    FORM 8-K
                   CURRENT REPORT PURSUANT TO SECTION 13 OF
                     THE SECURITIES EXCHANGE ACT OF 1934

          Date of Report
(Date of earliest event reported) April 12, 1999
                                  --------------

                           GENERAL MOTORS CORPORATION
            -----------------------------------------------------
            (Exact name of registrant as specified in its charter)

      STATE OF DELAWARE                 1-143                 38-0572515
----------------------------   -----------------------    -------------------
(State or other jurisdiction   (Commission File Number)   (I.R.S. Employer
 of incorporation)                                         Identification No.)

   100 Renaissance Center, Detroit, Michigan                 48265-1000
3044 West Grand Boulevard, Detroit, Michigan                 48202-3091
--------------------------------------------                 ----------
  (Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code       (313)-556-5000
                                                         --------------

                                    - 1 -

ITEM 5.  OTHER EVENTS

         On April 12, 1999 General Motors Corporation (GM) announced that the GM
Board of Directors  approved the complete  separation of Delphi from GM by means
of a  tax-free  spin-off.  GM's  consolidated  financial  statements  have  been
restated to reflect  Delphi as  discontinued  operations and were filed on April
15, 1999 on a Form 8-K dated April 12,  1999.  Included as part of this Form 8-K
is GM's restated Management's Discussion and Analysis of Financial Condition and
Results of Operations that corresponds to the restated financial statements.

                                 * * * * * *

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

  Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations

   The following management's discussion and analysis of financial condition and
results  of  operations  (MD&A)  should be read in  conjunction  with the Hughes
Electronics  Corporation  consolidated  financial  statements  and  MD&A for the
period ended December 31, 1998,  included as Exhibit 99 to this Annual Report on
Form 10-K,  and the  Delphi  Automotive  Systems  Corporation  (Delphi)  and the
General Motors Acceptance Corporation (GMAC) Annual Reports on Form 10-K for the
period ended December 31, 1998,  both filed  separately  with the Securities and
Exchange  Commission.  The  financial  data  related to Delphi is  presented  as
discontinued  operations for all periods  presented and Electronic  Data Systems
Corporation  (EDS) is  presented as  discontinued  operations  for 1996.  Hughes
Electronics  Corporation,  prior to the December 17, 1997  restructuring  of the
company,  is hereinafter  referred to as "former Hughes," and Hughes Electronics
Corporation,  subsequent to the December 17, 1997  restructuring of the company,
is hereinafter  referred to as "Hughes." All earnings per share amounts included
in the MD&A are reported as basic.
   GM presents separate supplemental consolidating financial information for
the following businesses:  Automotive, Electronics and Other Operations and
Financing and Insurance Operations.
   GM's reportable  operating  segments  within its Automotive,  Electronics and
Other Operations business consist of:

   .  General Motors Automotive (GMA), which is comprised of four regions: GM
      North America (GMNA), GM Europe (GME), GM Asia/Pacific (GMAP), and GM
      Latin America/Africa/Mid-East (GMLAAM), Delphi, Hughes, and Other.
      GMNA designs, manufactures, and markets vehicles primarily in North
      America under the following nameplates:  Chevrolet, Pontiac, GMC,
      Oldsmobile, Buick, Cadillac, and Saturn. GME, GMAP and GMLAAM meet the
      demands of customers outside North America with vehicles designed,
      manufactured and marketed under the following nameplates: Opel,
      Vauxhall, Holden, Isuzu, Saab, Chevrolet, GMC, and Cadillac.
   .  Hughes  includes  activities  relating to  designing,  manufacturing,  and
      marketing advanced technology electronic systems,  products,  and services
      for the telecommunications and space industries.
   .  The Other  segment  includes the design,  manufacturing  and  marketing of
      locomotives   and  heavy-duty   transmissions   and  the   elimination  of
      intersegment transactions.

   GM's  reportable  operating  segments  within  its  Financing  and  Insurance
Operations  business  consist of GMAC and Other.  GMAC provides a broad range of
financial services,  including consumer vehicle financing,  full-service leasing
and fleet leasing,  dealer financing,  car and truck extended service contracts,
residential  and  commercial  mortgage  services,  and  vehicle  and  homeowners
insurance.  The  Financing  and Insurance  Operations'  Other  segment  includes
financing entities operating in Canada, Germany and Brazil.
   The  disaggregated  financial  results  for GMA have  been  prepared  using a
management  approach,  which is consistent with the basis and manner in which GM
management  internally  disaggregates  financial information for the purposes of
assisting in making internal operating decisions. In this regard, certain common
expenses were allocated  among regions less precisely than would be required for
standalone financial  information prepared in accordance with generally accepted
accounting  principles (GAAP) and certain expenses (primarily certain U.S. taxes
related to non-U.S. operations) were included in the Automotive, Electronics and
Other Operations' Other segment.  The financial results represent the historical
information used by management for internal decision making purposes; therefore,
other data  prepared to represent  the way in which the business will operate in
the future, or data prepared on a GAAP basis, may be materially different.

                                    - 2 -
                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS

   In 1998, GM's  consolidated  income from continuing  operations  totaled $3.0
billion or $4.40 per share of $1-2/3 par value common stock,  compared with $6.5
billion or $8.52 per share of $1-2/3 par value  common stock and $4.1 billion or
$5.08 per share of $1-2/3 par value common stock in 1997 and 1996, respectively.
   The  1998  financial  results  were  impacted  by  charges  of  $228  million
after-tax,  or $0.35 per share of $1-2/3 par value common stock,  resulting from
GM's  1998  competitiveness  studies  (see  Competitiveness  Studies).  The 1997
financial  results  were  impacted  by two  significant  items:  a $4.3  billion
tax-free  gain, or $5.91 per share of $1-2/3 par value common  stock,  resulting
from the December 17, 1997 completion of the strategic  restructuring  of former
Hughes (see Hughes Financial Review); and charges of $3.1 billion after-tax,  or
$4.34 per  share of $1-2/3  par value  common  stock,  resulting  from GM's 1997
competitiveness studies (see Competitiveness  Studies).  Excluding the impact of
these and other  special  items of $44  million  in losses  and $476  million in
income for 1998 and 1997,  respectively,  income was $3.3 billion,  or $4.82 per
share of $1-2/3 par value common stock and $4.9  billion,  or $6.40 per share of
$1-2/3 par value common stock for 1998 and 1997, respectively.
   On February  5, 1999,  Delphi  completed  an initial  public  offering of 100
million shares of its common stock,  which  represented 17.7% of its outstanding
common  shares.  On April  12,  1999,  the GM Board of  Directors  approved  the
complete  separation of Delphi from GM by means of a tax-free  spin-off in which
80.1 percent of the ownership of Delphi,  452.6 million  shares of Delphi common
stock now owned by GM, will be  distributed  on a pro-rata basis to owners of GM
$1-2/3 par value common  stock,  and if GM receives a favorable  ruling from the
Internal  Revenue  Service prior to May 14, 1999, GM will  contribute  the other
2.2% of Delphi  shares it owns,  12.4 million  shares,  to a Voluntary  Employee
Beneficiary  Association  (VEBA) trust to fund benefits to hourly  retirees.  If
such a ruling is not received,  the additional 2.2 percent of Delphi shares held
by GM also will be distributed to GM stockholders, in which case the same record
date of May 25, 1999 and payment date of May 28, 1999 will be used.
   The financial data related to GM's investment in Delphi prior to the approved
May,  1999 spin-off is classified  as  discontinued  operations  for all periods
presented.  The  financial  data of Delphi  reflect  the  historical  results of
operations and cash flows of the  businesses  that were  considered  part of the
Delphi business segment of GM during each respective period; they do not reflect
many significant changes that will occur in the operations and funding of Delphi
as a result of the  separation  from GM and the IPO. The Delphi  financial  data
classified  as  discontinued  operations  reflect  the  assets  and  liabilities
transferred  to  Delphi  in  accordance  with the  terms of a master  separation
agreement  to which  Delphi and GM are  parties  (the  "Separation  Agreement").
Delphi and Delco Electronics Corporation ("Delco Electronics"),  the electronics
and mobile  communication  business that was  transferred  to Delphi in December
1997,  were under the common control of GM during such periods;  therefore,  the
Delphi  financial data include  amounts  relating to Delco  Electronics  for all
periods  presented,  although Delco  Electronics  was not integrated with Delphi
until December 1997.  GM's 1998,  1997 and 1996 net income  includes Delphi as a
discontinued  operation.  Delphi had net  losses of $93  million in 1998 and net
income  of $215  million  and  $853  million  in 1997  and  1996,  respectively.
Additional  information regarding the spin-off of Delphi is contained in Note 23
to the GM consolidated  financial  statements  filed on Form 8-K dated April 12,
1999.
   GM completed the split-off of Electronic  Data Systems  Corporation  (EDS) on
June 7, 1996 and, accordingly,  the financial results related to EDS through the
split-off  date have been  reported as  discontinued  operations.  GM's 1996 net
income,  includes  EDS as a  discontinued  operation  through  the June 7,  1996
split-off.  EDS  income  totaled  $10  million in 1996.  Additional  information
regarding  the  split-off of EDS is contained in Note 23 to the GM  consolidated
financial statements filed on Form 8-K dated April 12, 1999.

Automotive, Electronics and Other Operations
--------------------------------------------

   Highlights of financial performance by GM's Automotive, Electronics and Other
Operations  business  were as  follows  for the years  ended  December  31,  (in
millions):

                                        1998        1997        1996
                                        ----        ----        ----
Manufactured products sales and revenues
GMA                                 $125,683    $134,121    $127,590
Hughes                                 5,964       5,128       4,009
Other                                  2,629       8,894       8,458
                                    --------    --------    --------
  Manufactured products sales and 
     revenues                       $134,276    $148,143    $140,057
                                    ========    ========    ========

Net income (loss)
GMA                                   $1,634        $449      $2,337
Hughes                                   272         471         184
Other                                   (279)      4,245         338
                                       -----       -----      ------
  Income from continuing operations    1,627       5,165       2,859
Discontinued operations                  (93)        215         863
                                      ------       -----       -----
  Net income                          $1,534      $5,380      $3,722
                                       =====       =====       =====

   The amounts above and the GMA and Hughes Financial Reviews that are presented
on pages 4  through  9  reflect  the  change  in GM's  organizational  structure
resulting  from the  restructuring  of former  Hughes.  As such,  Hughes amounts
exclude Delco and Hughes Defense and Other includes Hughes Defense.

                                    - 3 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMA Financial Highlights

                                            Year Ended December 31,
                                            -----------------------
                                        1998 (1)    1997 (1)    1996 (1)
                                        --------    --------    --------
                                               (Dollars in Millions)
GMNA
Manufactured products sales 
  and revenues                       $94,201    $100,256     $93,382
                                      ------     -------      ------

Pre-tax income (loss)                  2,409        (249)        836
Income tax expense (benefit)             787        (272)         54
Earnings of nonconsolidated associates
  and minority interests                  13         (35)         37
                                     -------          --        ----
GMNA income (loss)                    $1,635        $(12)       $819
                                       =====          ==         ===

GME
Manufactured products sales 
  and revenues                       $25,036     $24,106     $25,528
                                      ------      ------      ------

Pre-tax income                           740         256       1,053
Income tax expense                       319         121         168
Earnings of nonconsolidated associates
  and minority interests                  (2)       (152)       (107)
                                       -----         ---         ---
GME income (loss)                       $419        $(17)       $778
                                         ===          ==         ===

GMLAAM
Manufactured products sales 
  and revenues                        $7,403      $8,572      $6,723
                                       -----       -----       -----

Pre-tax (loss) income                   (471)        536         667
Income tax (benefit) expense            (213)         43         106
Earnings of nonconsolidated associates
  and minority interests                  83         174          81
                                        ----         ---        ----
GMLAAM (loss) income                   $(175)       $667        $642
                                         ===         ===         ===

GMAP
Manufactured products sales 
  and revenues                        $2,923      $2,980      $3,001
                                       -----       -----       -----

Pre-tax (loss) income                    (82)       (235)         63
Income tax expense (benefit)               9         (29)         32
Earnings of nonconsolidated associates
  and minority interests                (152)         34          79
                                         ---        ----        ----
GMAP (loss) income                     $(243)      $(172)       $110
                                         ===         ===         ===

GMA (2)
Manufactured products sales 
  and revenues                      $125,683    $134,121    $127,590
                                    --------    --------    --------

Pre-tax income                         2,594         279       2,600
Income tax expense (benefit)             902        (149)        353
Earnings of nonconsolidated associates
  and minority interests                 (58)         21          90
                                     -------        ----      ------
GMA income                            $1,634        $449      $2,337
                                       =====         ===       =====

(1)Adjustments  have  been  made to GMA's  results  to  reflect  the  impact  of
   adjustments to Delphi's  management basis financial  statements in connection
   with its separation.
(2)GMA's results include  eliminations of activity  between GMNA, GME,  GMLAAM,
   GMAP.

                                    - 4 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Vehicle Unit Deliveries of Cars and Trucks - GMA
Years Ended December 31,
                                                         ------------------------
                                     1998                              1997                                1996
                        ------------------------------      ------------------------------      ------------------------------
                                               GM as                               GM as                               GM as
                                               a % of                              a % of                             a % of
                        Industry      GM      Industry      Industry      GM      Industry      Industry      GM      Industry
                        --------      --      --------      --------      --      --------      --------      --      --------
                                                                   (Units in Thousands)
GMNA
  United States
 
   Cars                   8,184     2,459      30.0%          8,289      2,689      32.4%         8,528     2,786      32.7%
   Trucks                 7,787     2,150      27.6%          7,212      2,077      28.8%         6,931     2,007      29.0%
                         ------     -----                    ------      -----                   ------     -----
     Total United States 15,971     4,609      28.9%         15,501      4,766      30.8%        15,459     4,793      31.0%
   Canada                 1,427       428      30.0%          1,424        451      31.7%         1,203       381      31.7%
   Mexico                   664       175      26.3%            496        143      28.9%           332        89      26.8%
                         ------     -----                    ------      -----                   ------     -----
  Total GMNA             18,062     5,212      28.9%         17,421      5,360      30.8%        16,994     5,263      31.0%
                         ------     -----                    ------      -----                   ------     -----
GME
   Germany                4,036       548      13.6%          3,792        566      14.9%         3,746       581      15.5%
   United Kingdom         2,546       329      12.9%          2,445        338      13.8%         2,282       328      14.4%
   Other West Europe      9,737       851       8.7%          8,942        804       9.0%         8,444       780       9.2%
                         ------     -----                    ------      -----                   ------     -----
   Total West Europe     16,319     1,728      10.6%         15,179      1,708      11.2%        14,472     1,689      11.7%
   Central/East Europe    2,828       129       4.6%          2,918        125       4.3%         2,405       100       4.2%
                         ------     -----                    ------      -----                   ------     -----
   Total GME             19,147     1,857       9.7%         18,097      1,833      10.1%        16,877     1,789      10.6%
                         ------     -----                    ------      -----                   ------     -----
GMLAAM
  Brazil                  1,533       344      22.5%          1,943        410      21.1%         1,731       384      22.2%
  Venezuela                 174        45      25.8%            178         48      26.7%            68        16      23.5%
  Other Latin America       864       129      14.9%            885        130      14.7%           784       114      14.5%
                         ------     -----                    ------      -----                   ------     -----
   Total Latin America    2,571       518      20.2%          3,006        588      19.6%         2,583       514      19.9%
  Africa                    614        81      13.2%            673        106      15.7%           681        81      11.9%
  Middle East               747        54       7.2%            693         52       7.5%           664        66      10.0%
                         ------     -----                    ------      -----                   ------     -----
   Total GMLAAM           3,932       653      16.6%          4,372        746      17.1%         3,928       661      16.8%
                         ------     -----                    ------      -----                   ------     -----
GMAP
   Australia                808       157      19.5%            724        128      17.7%           651       131      20.1%
   Other Asia and
     Pacific             10,068       286       2.8%         12,564        447       3.6%        13,081       494       3.8%
                         ------     -----                    ------      -----                   ------     -----
   Total GMAP            10,876       443       4.1%         13,288        575       4.3%        13,732       625       4.6%
                         ------     -----                    ------      -----                   ------     -----

Total Worldwide          52,017     8,165      15.7%         53,178      8,514      16.0%        51,531     8,338      16.2%
                         ======     =====                    ======      =====                   ======     =====
Years Ended December 31,
                                     ------------------------
                                1998           1997            1996
                                ----           ----            ----
                                         (Units in Thousands)
Wholesale Sales

GMNA
  Cars                         2,731          3,095            2,913
  Trucks                       2,340          2,454            2,239
                               -----          -----            ----- 
    Total GMNA                 5,071          5,549            5,152
                               -----          -----            -----
GME
  Cars                         1,882          1,708            1,673
  Trucks                         125            142              122
                              ------         ------           ------
    Total GME                  2,007          1,850            1,795
                               -----          -----            -----
GMLAAM
  Cars                           404            495              459
  Trucks                         248            290              244
                                 ---            ---              ---
    Total GMLAAM                 652            785              703
                                 ---            ---              ---
GMAP
  Cars                           202            176              199
  Trucks                         217            416              414
                                 ---            ---              ---
    Total GMAP                   419            592              613
                                 ---            ---              ---

Total Worldwide                8,149          8,776            8,263
                               =====          =====            =====

                                    - 5 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMA Financial Review

   Including  $228 million and $3.0  billion of  after-tax  charges for 1998 and
1997, respectively,  related to the competitiveness studies (see Competitiveness
Studies),  GMA's  income was $1.6  billion  and $449  million for 1998 and 1997,
respectively.  Excluding the competitiveness  studies charges,  GMA's income was
$1.9  billion  or 1.5% of  manufactured  products  sales and  revenues  and $3.5
billion or 2.6% of  manufactured  products sales and revenues for 1998 and 1997,
respectively. Income was $2.3 billion or 1.8% of manufactured products sales and
revenues  in 1996.  The  decrease  in 1998  income  was  primarily  due to lower
production  volumes at GMNA  associated with the work stoppages at two component
plants in  Flint,  Michigan,  as  discussed  below,  and the  economic  downturn
throughout  Latin  America,  partially  offset by material and  structural  cost
savings.
   Members of United Auto Workers Locals 659 and 651 in Flint,  Michigan  ceased
production  at two component  plants on June 5 and June 11, 1998,  respectively.
Work  stoppages at both  facilities  were resolved July 28, 1998 when  tentative
agreements  were reached.  Both agreements were ratified by the rank and file on
July 29, 1998.  Operations began to accelerate to normal  production levels July
30, 1998. These work stoppages had an aggregate  unfavorable after-tax impact of
approximately  $1.5  billion,  or $2.26 per share of GM $1-2/3 par value  common
stock during 1998 that  resulted from a loss of  approximately  371,000 units of
production.
   The increase in 1997 income compared to 1996  (excluding the  competitiveness
studies charges) was primarily due to higher wholesale sales volumes,  continued
improvement  in the  profitability  of new  vehicles,  and  lower  material  and
engineering  costs.  These  factors  were  partially  offset  by  higher  retail
incentives,  increased  commercial  spending  to support  the  numerous  vehicle
launches,  and the unfavorable  impact of approximately  $240 million  after-tax
related to work stoppage production losses in 1997.
   Manufactured products sales and revenues for 1998 were $125.7 billion,  which
represented  a decrease of $8.4  billion  compared  with 1997.  The decrease was
largely  due to a lower  number  of  wholesale  units  sold as a  result  of the
previously  mentioned work stoppages and the economic downturn  throughout Latin
America.  Manufactured products sales and revenues for 1997 were $134.1 billion,
which   represented  an  increase  of  $6.5  billion  compared  with  1996.  The
improvement  was  primarily  due to a 513,000 unit  increase in wholesale  sales
volumes.
   GMA reported 1998 pre-tax  income of $2.6 billion  compared with $279 million
and $2.6 billion for 1997 and 1996, respectively. Excluding the $224 million and
$4.7  billion  pre-tax  impact of the  competitiveness  studies  charges,  GMA's
pre-tax   income  was  $2.8   billion  and  $5.0  billion  for  1998  and  1997,
respectively. The decrease in 1998 pre-tax income (excluding the competitiveness
studies  charges)  was  primarily  due to the  impact of lower  wholesale  sales
resulting  from the  previously  mentioned  work  stoppages  and  higher  retail
incentives,  partially offset by material,  engineering and  manufacturing  cost
improvements.  The increase in 1997 pre-tax  income was  primarily due to higher
wholesale  sales  volumes,  continued  improvement in the  profitability  of new
vehicles, and lower material and engineering costs.
   GMA's 1998 worldwide market share decreased to 15.7%, compared with 16.0% and
16.2% in 1997 and 1996, respectively. The decrease in market share was primarily
due to dealer  inventory  shortages due to the above mentioned work stoppages at
GMNA.  GMNA's 1998 market share was 28.9% compared with 30.8% and 31.0% for 1997
and 1996, respectively.
   GMNA  reported  income of $1.6 billion for 1998  compared  with a loss of $12
million and income of $819  million for 1997 and 1996,  respectively.  Excluding
the  competitiveness  studies  charges,  GMNA's income was $1.7 billion and $2.4
billion  for 1998 and  1997,  respectively.  The  decrease  in  income  for 1998
compared to 1997(excluding  the  competitiveness  studies charges) was primarily
due to the  previously  discussed  work  stoppages,  minimized  by  strong  cost
performance which more than offset price reductions driven by competitive market
pressures. The 1998 cost performance resulted from quality initiatives, material
performance  and  reduced  structural  cost.  The  increase  in income  for 1997
compared to 1996 (excluding the  competitiveness  studies charges) was primarily
due to a 397,000 unit increase in wholesale sales volumes, continued improvement
in the profitability of new vehicles,  and lower material and engineering costs.
These  factors were  partially  offset by higher  retail  incentives,  increased
commercial  spending to support the numerous vehicle  launches in progress,  and
the unfavorable impact of the work stoppages.
   GME  reported  income of $419  million for 1998  compared  with a loss of $17
million and income of $778  million for 1997 and 1996,  respectively.  Excluding
the  competitiveness  studies  charge,  GME's  income was $471 million for 1997.
GME's results also included an after-tax  charge in 1998 of $44 million  related
to work schedule  modifications  at Opel Belgium and after-tax  gains in 1997 of
$103  million  related  to the sale of GME's  interest  in Avis  Europe  and $55
million related to a settlement  agreement with Volkswagen A.G.  Excluding these
items,  GME's  income  was $463  million  and $313  million  for 1998 and  1997,
respectively.  The  increase  in 1998  adjusted  earnings  compared  to 1997 was
primarily due to savings on material  costs and policy & warranty  spending,  as
well as lower equity losses from Saab  Automobile A.B.  (Saab).  The decrease in
1997  adjusted  earnings  compared to 1996 was primarily due to higher sales and
marketing costs under intensely competitive market conditions,  and lower equity
earnings  from  Saab  related  to the  launch  of the new 9-5  model.  The  1996
Restructuring  Agreement  between GM and Saab's  other  owners  (Investor  A.B.)
includes certain provisions and options which may

                                    - 6 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMA Financial Review (concluded)

impact the relative ownership  interests of the parties involved.  The agreement
gives GM and Adam  Opel the  right to  purchase  up to 100% of  Investor  A.B.'s
interest in Saab during 1999 and 2000. Investor A.B. has the right to sell up to
50% of its present  holdings in Saab to GM and Adam Opel in 2000.  GM  currently
maintains a 50% ownership interest in Saab.
   GMLAAM  reported a loss of $175 million for 1998 compared with income of $667
million and $642 million for 1997 and 1996,  respectively.  The decrease in 1998
earnings compared to 1997 was primarily due to the economic downturn  throughout
Latin  America,  $51  million  of  after-tax  charges  in  1998  related  to the
competitiveness  studies,  and higher  incentive  costs.  The  increase  in 1997
earnings  compared to 1996 was primarily due to an increase in wholesale  sales.
The  financial  outlook  for  GMLAAM is  uncertain  for 1999 due to the  ongoing
economic crisis in Latin America.  In 1998, GMLAAM reduced  employment levels by
approximately  21%,  in an  effort  to  resize  the  operations  to the  current
conditions.  An additional  reduction  should be accomplished in 1999 by further
significant schedule adjustments. Capital spending has also been greatly reduced
to conserve cash in the region.
   GMAP  reported a loss of $243  million in 1998  compared  with a loss of $172
million and income of $110  million for 1997 and 1996,  respectively.  Excluding
the  competitiveness  studies  charges,  GMAP's  losses were $146 million and $2
million for 1998 and 1997, respectively. Higher losses for 1998 compared to 1997
were primarily attributable to decreased equity earnings at Isuzu resulting from
a write down of investments  due to the economic  downturn in Asia and continued
spending  associated with GMAP's growth strategy.  The decrease in 1997 earnings
compared to 1996 was due to increased  spending  associated  with GMAP's  growth
strategy and the beginning of the economic downturn in Asia.
   GMA's  effective  income tax (credit)  rate for 1998 was 34.8%  compared with
(53.0)%  and 13.6% for 1997 and 1996,  respectively.  Excluding  the  previously
mentioned  competitiveness  studies charges,  the effective income tax rates for
1998 and 1997 were 34.5% and 32.3%, respectively. These adjusted rates indicated
a return to a more  normalized  level.  The lower  1996 tax rate  resulted  from
research  and  experimentation   credits  in  the  United  States,  a  favorable
resolution  of items  related  to GM's  1995 tax  return,  and a  favorable  tax
position in Mexico.

                                    - 7 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Hughes Financial Highlights

                                              Years Ended December 31,
                                              ------------------------
                                           1998        1997(1)       1996(1)
                                           ----        ----          ----
                                            (Dollars in Millions Except Per
Share Amounts)

Revenues                                  $5,964        $5,128       $4,009
                                           -----         -----        -----
Pre-tax income                               310           734          257
Income tax (benefit) expense                 (45)          237          105
Minority interests                            24            25           53
Losses in nonconsolidated associates        (128)          (72)         (42)
                                             ---         -----        -----
    Net income                              $251          $450         $163
                                             ===           ===          ===

   Earnings used for computation of Available
    Separate Consolidated Net Income (2)    $272          $471         $184

   Earnings per share attributable
    to Class H common stock (3)            $0.68         $1.18        $0.46

------------

(1)The 1997 and 1996  amounts  relate only to the  telecommunications  and space
   business  of former  Hughes to reflect  the  changes  to GM's  organizational
   structure  resulting from the Hughes  Transactions which occurred in December
   1997. See further discussion of Hughes Transactions below.
(2)Excludes  amortization of GM purchase  accounting  adjustments of $21 million
   in each of the years related to GM's  acquisition of Hughes Aircraft  Company
   (HAC) in 1985.
(3)For 1997 and 1996,  earnings per share  attributable  to Class H common stock
   are presented on a pro forma basis.  Prior to the Hughes  Transactions,  such
   amounts were calculated based on the financial  performance of former Hughes.
   Since  the  financial  highlights  for  1997  and  1996  relate  only  to the
   telecommunications  and space business of former Hughes,  they do not reflect
   the earnings per share  attributable  to the former Class H common stock on a
   historical  basis.  The  pro  forma  presentation,  therefore,  presents  the
   financial  results  which would have been achieved for 1997 and 1996 relative
   to  the  Class  H  common  stock  based  solely  on  the  performance  of the
   telecommunications  and space business of former Hughes. See Hughes Financial
   Review for further discussion.

Hughes Financial Review

   On December 17, 1997, GM and former Hughes completed a series of transactions
(Hughes  Transactions) that were designed to address strategic challenges facing
the three  principal  businesses  of former  Hughes  (consisting  of the defense
electronics,   automotive   electronics   and   telecommunications   and   space
businesses).  The Hughes  Transactions  included  the  tax-free  spin-off of the
defense  electronics  business of former Hughes  (Hughes  Defense) to holders of
GM's  $1-2/3 par value and Class H common  stocks,  the  transfer  of Delco from
former Hughes to Delphi, and the recapitalization of Class H common stock into a
new GM tracking  stock,  Class H common  stock,  that is linked to the remaining
telecommunications  and space business of Hughes.  The Hughes  Transactions were
followed  immediately by the merger of Hughes Defense with Raytheon Company. The
1997 and 1996 amounts presented for Hughes relate only to the telecommunications
and space businesses of former Hughes.
   Revenues  increased  to $6.0 billion in 1998,  compared  with $5.1 billion in
1997 and $4.0  billion in 1996.  The 1998  revenue  growth was  propelled  by an
increase  in the  DIRECTV(R)  businesses  due to strong  subscriber  growth  and
average monthly revenues per subscriber,  as well as low subscriber churn rates;
an  increase  at  PanAmSat  primarily  from the May  1997  PanAmSat  merger  and
increased  operating  lease  revenues  for  video,  data  and   Internet-related
services;  higher  commercial  satellite  sales; and higher sales of DIRECTV(TM)
receiver  equipment.  The 1997  increase  was due  primarily  to strong  DIRECTV
subscriber growth,  higher sales of commercial  satellites and completion of the
PanAmSat merger.
   Operating profit,  excluding  amortization of purchase accounting adjustments
related to GM's  acquisition of HAC, was $270 million in 1998 compared with $306
million  and  $210  million  in 1997  and  1996,  respectively.  Full-year  1998
operating  profit  margin on the same basis was 4.5%  compared with 6.0% in 1997
and 5.2% in 1996.  The lower 1998 operating  profit and operating  profit margin
were  principally  a result of lower  sales of  wireless  telephone  systems and
private business  networks in the Asia Pacific region, as well as provisions for
estimated losses associated with uncollectible amounts due from certain wireless
customers  at Hughes  Network  Systems.  These were  offset in part by the lower
operating  losses at domestic  DIRECTV and higher  operating profit at PanAmSat.
The increase in 1997  operating  profit and  operating  profit  margin  resulted
primarily  from the  completion of the PanAmSat  merger,  reduced  losses in the
DIRECTV business and higher commercial satellite sales.

                                    - 8 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Hughes Financial Review (concluded)

   Pre-tax income was $310 million in 1998,  compared with $734 million and $257
million in 1997 and 1996, respectively.  The decrease in 1998 primarily resulted
from the 1997 $490  million  pre-tax  gain  recognized  in  connection  with the
PanAmSat  merger in 1997,  goodwill  amortization  associated  with the PanAmSat
merger and a  provision  for  uncollectible  amounts due from  certain  wireless
customers,  offset by a decrease in interest expense and an increase in interest
income. The increase in 1997 of $477 million from 1996 reflects the $490 million
pre-tax gain discussed  above,  the completion of the PanAmSat  merger,  reduced
losses in the DIRECTV business and higher commercial  satellite sales.  Nineteen
ninety-six  included the $120 million  pre-tax gain  recognized from the sale of
2.5% of DIRECTV to AT&T.
   The effective  income tax rate for 1998 was (14.5)%,  compared with 32.3% and
40.9% in 1997 and 1996,  respectively.  The  effective  income  tax rate in 1998
benefited  from the  favorable  adjustment  relating  to an  agreement  with the
Internal Revenue Service regarding the treatment of research and experimentation
costs for the years 1983 through 1995. The 1997 decrease in the effective income
tax rate was due  primarily  to an  increase  in  research  and  experimentation
credits and the favorable resolution of certain tax contingencies.
   Excluding  amortization of purchase  accounting  adjustments  related to GM's
acquisition of HAC, Hughes' earnings used for computation of available  separate
consolidated net income for 1998 was $272 million compared with $471 million and
$184 million in 1997 and 1996, respectively.
   In May 1998,  Hughes  purchased  an  additional  9.5%  interest in  PanAmSat,
increasing Hughes' ownership interest in PanAmSat to 81.0%.
   In October 1998,  Hughes agreed to acquire,  pending  regulatory  approval in
Mexico, an additional ownership interest in Grupo Galaxy Mexicana,  S.A. de C.V.
(GGM),  a Galaxy Latin America,  LCC (GLA) local  operating  company  located in
Mexico,  from Grupo MVS,  S.A. de C.V.  (MVS).  Hughes'  equity  ownership  will
represent 49.0% of the voting equity and all of the non-voting equity of GGM. As
part of the  transaction,  Hughes acquired from MVS an additional 10.0% interest
in GLA,  increasing  its  ownership  interest to 70.0% as well as an  additional
19.8% interest in SurFin Ltd., increasing its ownership percentage to 59.1%.
   In December  1998,  Hughes agreed to acquire all of the  outstanding  capital
stock of  United  States  Satellite  Broadcasting  Company,  Inc.  (USSB).  USSB
provides  direct-to-home  premium  satellite  programming  in  conjunction  with
DIRECTV's basic programming service. USSB launched its service in June 1994 and,
as of December 31, 1998, had more than two million subscribers  nationwide.  The
acquisition  will be accounted for using the purchase method of accounting.  The
purchase  price,  consisting  of cash  and GM  Class  H  common  stock,  will be
determined at closing based upon an agreed-upon formula and will not exceed $1.6
billion  in  the  aggregate.  Subject  to  certain  limitations  in  the  merger
agreement, USSB shareholders will be entitled to elect to receive cash or shares
of GM Class H common  stock.  The amount of cash to be paid in the merger cannot
be less than 30% or greater than 50% of the  aggregate  purchase  price with the
remaining consideration consisting of GM Class H common stock. The merger, which
is  subject  to  USSB  shareholder  approval  and  the  receipt  of  appropriate
regulatory approval, is expected to close in early to mid-1999.
   In January 1999, Hughes agreed to acquire  Primestar,  Inc.'s (Primestar) 2.3
million-subscriber   medium-power   direct-to-home   business.   In  a   related
transaction,  Hughes also agreed to acquire the high-power  satellite assets and
direct  broadcast  satellite (DBS) orbital  frequencies of Tempo, a wholly-owned
subsidiary  of TCI  Satellite  Entertainment,  Inc. The  Primestar  transaction,
pending regulatory and Primestar lender approval,  is expected to close in early
to mid-1999. The Tempo transaction,  pending regulatory approval, is expected to
close in mid to late-1999.

                                    - 9 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Financing and Insurance Operations
----------------------------------

  Highlights of financial performance by GM's Financing and Insurance Operations
business were as follows for the years ended December 31, (in millions):

                                                 1998        1997        1996
                                                 ----        ----        ----
Financing revenues
GMAC                                          $12,731     $12,577     $12,644
Other                                             854         185          30
                                             --------    --------   ---------
  Total                                       $13,585     $12,762     $12,674
                                              =======     =======     =======

Net income
GMAC                                           $1,325      $1,301      $1,240
Other                                              97          17           1
                                              -------     -------    --------
  Total                                        $1,422      $1,318      $1,241
                                               ======      ======      ======

GMAC Financial Highlights

                                                    Years Ended December 31,
                                                    ------------------------
                                                 1998        1997        1996
                                                 ----        ----        ----
                                                      (Dollars in Millions)
Financing revenues
  Retail and lease financing                   $3,869      $3,571      $3,822
  Operating leases                              7,233       7,260       7,215
  Wholesale and term loans                      1,629       1,746       1,607
                                                -----       -----       -----
    Total financing revenues                   12,731      12,577      12,644
Interest and discount                           5,787       5,256       4,938
Depreciation on operating leases                4,693       4,677       4,627
                                                -----       -----       -----
    Net financing revenue                       2,251       2,644       3,079
Mortgage revenue                                2,030       1,499         944
Insurance premiums earned                       1,859       1,360       1,158
Other income                                    1,295       1,159       1,228
                                                -----       -----       -----
    Net financing revenue and other             7,435       6,662       6,409
Expenses                                        5,498       4,448       4,332
                                                -----       -----       -----
Pre-tax income                                  1,937       2,214       2,077
Income tax expense                                612         913         837
                                               ------      ------      ------
    Net income                                 $1,325      $1,301      $1,240
                                                =====       =====       =====

Net income from automotive financing operations  $984        $910        $946
Net income from mortgage operations               115         167         102
Net income from insurance operations              226         224         192
                                               ------      ------      ------
    Net income                                 $1,325      $1,301      $1,240
                                                =====       =====       =====

GMAC Financial Review

   GMAC's 1998  consolidated  net income increased 2% over 1997 to $1.3 billion.
Net income from automotive financing operations totaled $984 million, up 8% from
1997. Earnings were higher due to retail asset growth, reduced credit losses and
a lower  effective  income  tax rate,  partially  offset  by lower net  interest
margins and lower wholesale volume. Net income from insurance operations totaled
$226 million,  up from the $224 million earned in 1997. Net income from mortgage
operations totaled $115 million, down from $167 million earned in 1997. Earnings
were lower primarily as a result of reduced  mortgage asset values due to higher
prepayment levels.
   During 1998,  GMAC financed 41.8% of new GM vehicle retail  deliveries in the
United  States,  up from  33.1% and 28.4% in 1997 and  1996,  respectively.  The
improvements  since 1996  primarily  reflect higher  volumes  generated  through
special  rate  financing  and lease  incentive  programs  sponsored  by GM. This
improvement was achieved amid continued  competitive pressures in the automotive
financing marketplace.

                                    - 10 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

GMAC Financial Review (concluded)

    GMAC's automotive  financing revenue totaled $12.7 billion in 1998, compared
with $12.6 billion for both 1997 and 1996.  Higher retail financing  revenues in
1998 were partially offset by a decline in wholesale revenues,  principally from
the reduction in average  wholesale  receivable  balances related to the GM work
stoppages.
   GMAC's  worldwide cost of borrowing  decreased to 5.99%,  compared with 6.30%
and 6.57% in 1997 and 1996,  respectively.  The cost of borrowings in the United
States  was  5.89%  in 1998,  down  from  6.39%  and  6.51%  in 1997  and  1996,
respectively.  The lower average borrowing costs since 1996 are largely a result
of a decrease in U.S.  interest rates and a greater  proportion of floating rate
debt compared to fixed rate debt.
   Net automotive  financing revenue combined with mortgage  revenue,  insurance
premiums, and other income increased to $7.4 billion, compared with $6.7 billion
and $6.4 billion in 1997 and 1996, respectively.  The increases in 1998 and 1997
are primarily due to results from mortgage and insurance  operations,  partially
offset by reduced net automotive financing margins.
   Expenses  increased  by $1.1  billion  and $116  million  in 1998  and  1997,
respectively.  The increases  during 1998 and 1997 were  primarily due to higher
costs for salaries and benefits, increased insurance losses, and other operating
charges incidental to expanding mortgage and insurance business activities.
   GMAC's effective  income tax rate for 1998 was 31.6%,  compared with 41.2% in
1997 and 40.3% in 1996. The favorable change in 1998 was primarily  attributable
to lower  U.S.  and  foreign  taxes  assessed  on  foreign  source  income and a
favorable change  resulting from periodic  assessments of state and local income
tax  accruals.  The  unfavorable  change in 1997 was primarily  attributable  to
increases  in accruals  from prior years  based on  periodic  assessment  of the
adequacy of such accruals and higher state and local income taxes.

Competitiveness Studies

    The global automotive industry continues to be increasingly  competitive and
is presently undergoing significant  restructuring and consolidation activities.
All of the major industry participants are continuing to increase their focus on
efficiency and cost improvements,  while excess capacity led to continuing price
pressures.  As a result,  GMNA, GME, GMLAAM,  and GMAP initiated studies in 1997
concerning the long-term  competitiveness of all facets of their businesses.  As
market conditions continued to warrant such review, the competitiveness  studies
were again completed in 1998 in conjunction  with the annual  business  planning
cycle. Additional information regarding the competitiveness studies is contained
in Note 2 to the GM consolidated financial statements as filed on April 15, 1999
on a Form 8-K dated April 12, 1999.
   Based on the results of these  competitiveness  studies,  GM recorded pre-tax
charges  against income  totaling $224 million ($228 million after tax, or $0.35
per  share of $1-2/3  par value  common  stock) in 1998 and $5.0  billion  ($3.1
billion after-tax, or $4.34 per share of $1-2/3 par value common stock) in 1997.
   In 1998,  the pre-tax  charges  were  comprised  of $105 million ($80 million
after-tax)  for GMNA, $82 million ($51 million  after-tax)  for GMLAAM,  and $37
million ($97 million after-tax) for GMAP. Overall,  these charges had the effect
of  increasing  1998  cost of sales,  depreciation  and  amortization  and other
expenses by $92 million, $67 million and $65 million, respectively. In 1997, the
pre-tax  charges were  comprised of $3.8 billion  ($2.4  billion  after tax) for
GMNA, $848 million ($488 million  after-tax) for GME, $174 million ($170 million
after-tax) for GMAP and $205 million ($128 million after-tax) for GM Automotive,
Electronics and Other Operations' Other segment.  These charges reduced 1997 net
sales and revenues by $548 million and increased cost of sales, depreciation and
amortization,  and other expenses by $1.4 billion, $3.0 billion and $72 million,
respectively.  Accruals  related to capacity  reductions  and expenses that were
part of the 1997  charges  that still  remain as of December 31, 1998 total $1.1
billion.  Going forward,  GM's future cash requirements relating to the 1998 and
1997 charges are expected to total approximately $1.3 billion over the next five
years, with over 70% evenly expended over the first three years.
   The  competitiveness  studies charges  included  amounts for  underperforming
assets,  including both vehicle and component  manufacturing assets, pursuant to
GM's policy for the valuation of long-lived assets.  Future investments relating
to underperforming product lines will be expensed.  Charges also include amounts
for voluntary employee separation  programs,  recorded when the employee accepts
the offer in accordance with GM's policy for such programs.
   GM will  continue  to  monitor  the  competitiveness  of all  aspects  of its
businesses and further  competitiveness  studies will be undertaken  when and as
market conditions warrant.

                                    - 11 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Year 2000

   Many computerized  systems and microprocessors that are embedded in a variety
of  products  either  made  or used by GM have  the  potential  for  operational
problems  if they lack the  ability to handle the  transition  to the Year 2000.
Because  this  issue has the  potential  to cause  disruption  of GM's  business
operations,  GM,  including  Delphi,  has  developed a  comprehensive  worldwide
program to identify and remediate  potential  Year 2000 problems in its business
information   systems  and  other  systems   embedded  in  its  engineering  and
manufacturing operations. Additionally, GM has initiated communications and site
assessments with its suppliers,  its dealers and other third parties in order to
assess and reduce the risk that GM's operations  could be adversely  affected by
the failure of these third parties to adequately address the Year 2000 issue.
   One of GM's first priorities was the analysis of  microprocessors  used in GM
passenger cars and trucks.  This review  included all current and planned models
as well as the  electronics in older cars and trucks  produced during the period
of approximately  the last 15 years. GM began installing  microchips  capable of
processing date  information  approximately 15 years ago. Most of the processors
reviewed have no date-related  functionality,  and accordingly have no Year 2000
issues.  Of the vehicles with  processors that perform  date-related  functions,
none have any Year 2000 issues.
   GM's Year 2000 program  teams are  responsible  for  remediating  all of GM's
information technology and embedded systems.  Information technology principally
consists of business  information  systems  (such as mainframe  and other shared
computers and associated business application software) and infrastructure (such
as personal computers, operating systems, networks and devices like switches and
routers).  Embedded systems include  microprocessors  used in factory automation
and in systems such as elevators,  security and facility  management.  GM's Year
2000 program includes assessment and remediation services provided by Electronic
Data Systems Corporation (EDS) pursuant to a Master Service Agreement with GM.

   The Year 2000 program is being implemented in seven phases, some of which are
being conducted concurrently:

    Inventory --  identification  and  validation of an inventory of all systems
    that could be affected by the Year 2000 issue. The inventory phase commenced
    in  earnest  in  1996  and is  substantially  complete.  It  has  identified
    approximately  7,600  business  information  systems  and about 1.7  million
    infrastructure items and embedded systems.

    Assessment  -- initial  testing,  code  scanning,  and supplier  contacts to
    determine  whether  remediation is needed and developing a remediation plan,
    if   applicable.   The  assessment  of  business   information   systems  is
    substantially  complete and included a determination  that about one quarter
    of such systems  should be regarded as "critical"  based on criteria such as
    the  potential for business  disruption.  The  assessment of  infrastructure
    items and embedded systems was substantially completed by the end of 1998.

    Remediation  -- design and  execution  of a  remediation  plan,  followed by
    testing for  adherence to the design.  GM has  substantially  completed  the
    remediation  of its critical  and  non-critical  systems.  A small number of
    systems will be  remediated  or replaced in 1999.  Unimportant  systems have
    been and will continue to be removed from GM's Year 2000  inventory and will
    not be  remediated.  GM believes that it will meet its targets for Year 2000
    readiness.  In  the  normal  course  of  its  business  plans,  GM's  Delphi
    Automotive Systems unit is incrementally  implementing  enterprise  software
    that will  replace  and  thereby  eliminate  the need to  remediate  certain
    existing systems. Implementation of this software at several Delphi sites is
    scheduled for  completion in the first quarter of 1999,  and another  Delphi
    site implementation is not expected to be complete until July 1999.

    System  Test -- testing of  remediated  items to ensure  that they  function
    normally after being replaced in their original operating environment.  This
    phase is closely  related to the remediation  phase and follows  essentially
    the same schedule.

    Implementation  -- return of items to normal  operation  after  satisfactory
    performance  in system  testing.  This phase  follows  essentially  the same
    schedule as remediation and system testing.

    Readiness  Testing -- planning  for and testing of  integrated  systems in a
    Year 2000 ready  environment,  including  ongoing  auditing  and  follow-up.
    Readiness  testing is currently  underway.  This phase commenced  during the
    fourth  quarter of 1998 and is  expected  to be the major  focus of the Year
    2000 program throughout 1999.

                                    - 12 -
                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Year 2000 (continued)

    Contingency  Planning -- development  and execution of plans that narrow the
    focus on specific areas of significant concern and concentrate  resources to
    address them. GM currently  believes that the most  reasonably  likely worst
    case scenario is that there will be some  localized  disruptions  of systems
    that will affect individual business processes,  facilities or suppliers for
    a short time  rather than  systemic  or  long-term  problems  affecting  its
    business  operations as a whole.  GM  contingency  planning will continue to
    identify  systems or other aspects of GM's business or that of its suppliers
    that it believes would be most likely to experience  Year 2000 problems.  GM
    contingency  planning will also address those business operations in which a
    localized disruption could have the potential for causing a wider problem by
    interrupting  the flow of products,  materials or data to other  operations.
    Because there is uncertainty as to which  activities may be affected and the
    exact nature of the problems that may arise, GM's contingency  planning will
    focus on  minimizing  the scope and  duration of any  disruptions  by having
    sufficient  personnel,  inventory  and other  resources in place to permit a
    flexible,  real-time  response  to  specific  problems  as they may arise at
    individual  locations  around the  world.  Some of the  actions  that GM may
    consider include the deployment of emergency response teams on a regional or
    local basis and the development of plans for the allocation,  stockpiling or
    re-sourcing  of  components  and  materials  that  may  be  critical  to our
    continued   production.   Specific   contingency  plans  and  resources  for
    permitting  the  necessary  flexibility  of  response  are  expected  to  be
    identified and put into place commencing in mid-1999.

   GM's  communication with its suppliers is a focused element of the assessment
and  remediation  phases  described  above.  GM is a leading  participant  in an
industry trade  association,  the Automotive  Industry  Action Group,  which has
distributed Year 2000 compliance  questionnaires  as well as numerous  awareness
and assistance  mailings to about half of the 100,000 supplier sites that supply
GM throughout the world. Responses to these questionnaires, which were generally
sent to GM's  principal  suppliers,  have been  received  from about half of the
supplier sites to which they were sent. Many of the non-responding suppliers are
communicating  directly  with  GM on an  informal  basis.  Additionally,  GM has
initiated  its  own  review  of  suppliers  considered  to be  critical  to GM's
operations,  including  more  than  2,400  on-site  assessments  to date.  These
assessment  efforts  have  been  substantially  completed  with  respect  to the
critical supplier sites.  Based on its assessment  activity to date, GM believes
that a  substantial  majority of its suppliers  are making  acceptable  progress
toward Year 2000  readiness.  GM has  established  a program to provide  further
assistance  to  suppliers  that desire more input or that are  believed to be at
high risk of noncompliance as a result of the foregoing assessment efforts. This
supplier  assistance program currently includes providing  compliance  workshops
and   remediation   consultants   to  work  with  suppliers  on  developing  and
implementing their own remediation  programs.  GM's contingency planning efforts
described  above are also  expected to address any  critical  suppliers  that GM
identifies as being at high risk of encountering Year 2000 problems.
   GM is not  relying  entirely  on  the  receipt  of  written  assurances  from
suppliers  with  respect to their Year 2000  compliance.  GM is also  evaluating
certain  suppliers on a first-hand basis and seeking to enhance their likelihood
of full Year 2000  readiness  by  actively  assisting  them  with  training  and
consultation   regarding  Year  2000  remediation   projects.  GM  expects  that
information from our suppliers,  written  responses and interactions  with them,
will  provide  GM  with a  basis  for  further  contingency  planning  and  risk
management.
   GM also has a program to work with its independent dealers on their Year 2000
readiness.  This program includes distributing  materials that assist dealers in
designing and executing  their own assessment and  remediation  efforts.  GM has
also included Year 2000 compliance  criteria as part of its established  program
for certifying that third-party  business information systems properly interface
with other systems provided to dealers by GM.
   GM's direct Year 2000  program  cost is being  expensed as incurred  with the
exception  of  capitalizable   replacement  hardware  and,  beginning  in  1999,
internal-use  software.  Total incremental  spending by GM is not expected to be
material to the Corporation's operations, liquidity or capital resources.
   In addition to the work for which GM has direct financial responsibility, EDS
is  providing  Year  2000-related  services to GM, as required  under the Master
Service  Agreement.  These  services are being provided by EDS as part of normal
fixed price services and other on-going  payments to EDS. GM's current  forecast
is that its total direct  expenditures,  and the value of services  performed by
EDS attributable to GM's Year 2000 program,  will be between  approximately $710
million and $780 million for its entire Year 2000  program.  Of this amount,  GM
currently   expects  its  total  Year  2000   direct   spending  to  be  between
approximately $450 million and $520 million, with peak spending occurring in the
last quarter of 1998,  and early in 1999.  This total direct  spending  estimate
includes an  additional  payment of $75 million that GM has agreed to pay to EDS
at the end of the first  quarter of 2000 if systems  remediated by EDS under the
Master Service  Agreement do not cause a significant  business  disruption  that
results in a material  financial  loss to GM due to the millennium  change.  The
estimated  value of the services that EDS is required to provide to GM under the
Master Service  Agreement,  attributable  to work being  performed in connection
with GM's Year 2000 program, is approximately $335 million.

                                    - 13 -
                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Year 2000  (concluded)

   GM incurred  approximately  $40 million of Year 2000 expense  during 1997 and
approximately  $145  million in 1998,  of which,  $7 million and $40 million was
incurred on behalf of Delphi in 1997 and 1998, respectively. Also, the estimated
value of  services  provided  to GM by EDS during 1997 and 1998 under the Master
Service  Agreement that were  attributable  to work performed in connection with
GM's Year 2000 program,  was approximately $260 million.  Thus, the total direct
expenditures by GM, and value of Year 2000-related  services performed by EDS in
1997 and 1998, attributable to GM's Year 2000 program, amounted to approximately
$445 million.
   Despite the incremental Year 2000 spending expected to be incurred throughout
the  Corporation,  GM's  current  business  plan  projects  continued  declining
information  technology expenses.  GM's total Year 2000 costs noted above do not
include  information  technology projects that have been accelerated due to Year
2000, which are estimated to be approximately $30 million.
   In view of the  foregoing,  GM does  not  currently  anticipate  that it will
experience a significant disruption of its business as a result of the Year 2000
issue.  However,  there is still uncertainty about the broader scope of the Year
2000  issue as it may  affect GM and third  parties  that are  critical  to GM's
operations.  For example,  lack of readiness by electrical and water  utilities,
financial  institutions,  government  agencies  or other  providers  of  general
infrastructure could, in some geographic areas, pose significant  impediments to
GM's ability to carry on its normal operations in the area or areas so affected.
In the event that GM is unable to complete  its  remedial  actions as  described
above and is unable to implement  adequate  contingency  plans in the event that
problems  are  encountered,  there  could be a material  adverse  effect on GM's
business, results of operations or financial condition.
   The foregoing discussion describes the Year 2000 program being implemented by
GM,  including  Delphi,  and its  consolidated  subsidiaries  other than Hughes.
Information  about the Year 2000 efforts of Hughes can be found in Exhibit 99 to
GM's December 31, 1998 Form 10-K.
   Statements  made herein about the  implementation  of various  phases of GM's
Year 2000 program, the costs expected to be associated with that program and the
results that GM expects to achieve constitute  forward-looking  information.  As
noted  above,  there are many  uncertainties  involved  in the Year 2000  issue,
including the extent to which GM will be able to successfully  remediate systems
and adequately  provide for contingencies that may arise, as well as the broader
scope of the  Year  2000  issue  as it may  affect  third  parties  that are not
controlled by GM.  Accordingly,  the costs and results of GM's Year 2000 program
and the extent of any impact on GM's operations could vary materially from those
stated herein.

LIQUIDITY AND CAPITAL RESOURCES

Automotive, Electronics and Other Operations
--------------------------------------------

   Cash,  marketable  securities,  and $3.0  billion of assets of the  Voluntary
Employees'  Beneficiary   Association  (VEBA)  trust  invested  in  fixed-income
securities,  at December  31, 1998 totaled  $13.1  billion  compared  with $16.5
billion at December 31, 1997.  During 1997,  GM elected to pre-fund  part of its
other  postretirement   benefits  liability,   which  is  primarily  related  to
postretirement  health care expenses,  by creating a VEBA trust.  The total VEBA
assets,  which  approximated  $4.6 billion and $3.0 billion at December 31, 1998
and 1997, respectively,  had the effect of reducing GM's postretirement benefits
liability on the consolidated balance sheet.
   Net liquidity, calculated as cash and marketable securities less the total of
loans  payable and  long-term  debt,  was $1.8  billion at December  31, 1998, a
decrease of $5.3 billion from the prior year.  GM previously  indicated  that it
had a goal of  maintaining  $13.0 billion of cash and  marketable  securities in
order to continue  funding  product  development  programs  throughout  the next
downturn in the business  cycle.  This $13.0 billion target includes cash to pay
certain costs that were pre-funded in part by VEBA contributions.
   Long-term  debt was $7.1  billion  at  December  31,  1998,  an  increase  of
approximately  $1.4 billion from the prior year.  The ratio of long-term debt to
long-term debt and GM investment in Automotive, Electronics and Other Operations
was 58.1% and 38.6% at December  31, 1998 and 1997,  respectively.  The ratio of
long-term  debt and  short-term  loans  payable to the total of this debt and GM
investment was 61.8% and 41.3% at December 31, 1998 and 1997, respectively.
   GM believes it has sufficient  resources to meet anticipated future cash flow
requirements. In addition to cash flows from operations, GM and its subsidiaries
maintain  substantial  lines of  credit  with  various  financial  institutions.
Additional  information on GM's available credit facilities is contained in Note
10 to the GM consolidated  financial  statements as filed on April 15, 1999 on a
Form 8-K dated April 12, 1999.

                                    - 14 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Financing and Insurance Operations
----------------------------------

   GM's  Financing  and  Insurance  Operations  primarily  consist  of GMAC.  At
December 31, 1998,  GMAC owned assets and serviced  automotive  receivables  for
others  totaling  $138.7 billion  compared with $121.2 billion at year end 1997.
Earning  assets  totaled  $125.1 billion and $104.0 billion at December 31, 1998
and  1997,   respectively.   The  increase  in  earning   assets  was  primarily
attributable  to  increases  in  automotive  finance  receivables   outstanding,
operating  lease assets,  the investments in securities  portfolio,  real estate
mortgages  outstanding and  receivables  due from GM. Cash and cash  equivalents
totaled   $618  million  and  $759  million  at  December  31,  1998  and  1997,
respectively.
   GMAC's  consolidated  finance  receivables,  net of unearned income,  totaled
$72.1 billion and $60.0 billion at December 31, 1998 and 1997, respectively. The
higher  outstanding  balance  was  primarily  attributable  to  a  $7.5  billion
worldwide  increase in retail  receivables,  a $3.1 billion increase in U.S. and
European wholesale receivables and a $1.8 billion increase in term loans.
   GMAC's liquidity,  as well as its ability to profit from ongoing  acquisition
activity,  is in large part  dependent  on its  access to capital  and the costs
associated with raising funds in different  segments of the capital markets.  In
this regard,  GMAC regularly  accesses the short-,  medium-,  and long-term debt
markets,  principally  through  commercial  paper,  term notes, and underwritten
issuances.  GMAC's  borrowings  outstanding  at December 31, 1998 totaled $106.2
billion  compared with $86.9 billion at December 31, 1997.  GMAC's ratio of debt
to  stockholder's  equity at  December  31,  1998 was  10.8:1,  up from 9.9:1 at
December 31, 1997. The higher  year-to-year debt levels were principally used to
fund increased asset levels.  GMAC has continued to use an asset  securitization
program as an alternative  funding source and has sold finance  receivables that
it  continues  to service for a fee.  The  servicing  portfolio  of sold finance
receivables  totaled  $7.3  billion and $12.4  billion at December  31, 1998 and
1997, respectively.
   GMAC and its subsidiaries  maintain  substantial bank lines of credit,  which
totaled  $42.9  billion  and  $39.8  billion  at  December  31,  1998 and  1997,
respectively.  The unused portion of these credit lines totaled $33.2 billion at
December 31, 1998, which was $2.8 billion higher than at December 31, 1997.

Book Value Per Share

   Book value per share of $1-2/3 par value  common  stock  decreased  to $20.00
from $22.37 at December 31, 1998 and 1997, respectively. Book value per share of
Class H common  stock  decreased  to $12.00 at December  31, 1998 from $13.42 at
December 31, 1997. Book value per share was determined  based on the liquidation
rights of the various classes of common stock.

Stock Repurchases

   In  February  1998,  the GM Board of  Directors  (GM  Board)  approved a $4.0
billion stock repurchase program. Due to the previously mentioned work stoppages
during the second and third quarters of 1998, stock repurchases were temporarily
suspended as part of GM's cash conservation  initiatives.  The stock repurchases
were  reinstated  during  the  first  quarter  of 1999  and are  expected  to be
completed  by the  end of  1999.  Upon  completion  of the  $4.0  billion  stock
repurchase  program,  GM's stock  repurchases since January 1997 will total $9.0
billion.  In April 1999, GM redeemed the Series B Preference  Stock  pursuant to
its option to do so which commenced on January 1, 1999.

CASH FLOWS

Automotive, Electronics and Other Operations
--------------------------------------------

   Net cash provided by operating activities was $8.7 billion, $9.6 billion, and
$11.8 billion in 1998,  1997, and 1996,  respectively.  The decrease in net cash
provided by operating  activities in 1998 primarily  resulted from a decrease in
cash  generated  from  lower  net  income  primarily  due to the work  stoppages
previously discussed,  partially offset by lower VEBA contributions in 1998. The
decrease in net cash provided by operating activities in 1997 primarily resulted
from  a  $3.0  billion  VEBA  contribution  and  higher  pension  contributions,
partially  offset by an  increase  in cash  generated  from  higher net  income.
Depreciation  and  amortization  expenses  increased  by  $3.5  billion  in 1997
primarily due to the competitiveness studies charges.

                                    - 15 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Automotive, Electronics and Other Operations (concluded)
--------------------------------------------------------

   Net cash used in investing  activities was  relatively  unchanged at $7.0 and
$7.1  billion for 1998 and 1997,  respectively.  The increase in cash due to the
net change in investments in other marketable securities and operating leases in
1998 was offset by the proceeds from  borrowings of Hughes  Defense prior to the
spin-off  of  Hughes  Defense  in 1997.  Net cash used in  investing  activities
decreased  $1.7  billion in 1997 from $8.9  billion in 1996.  This  decrease was
primarily  due to GM's receipt of $4.0 billion in proceeds  from  borrowings  of
Hughes Defense,  partially  offset by a $1.7 billion  increase in investments in
companies,  net of cash acquired,  which primarily  related to the completion of
the merger of the  satellite  service  operations of former Hughes and PanAmSat.
These amounts were also offset by an intercompany  payment from EDS prior to its
separation in 1996 and lower dividends received from GMAC in 1997.
   Net cash used in financing  activities  was $2.8 billion,  $6.6 billion,  and
$1.3 billion in 1998, 1997 and 1996, respectively. The decrease in cash used for
financing activities in 1998 was primarily due to a $2.6 billion net increase in
loans  payable  and  long-term  debt  and a  decrease  in cash  used  for  stock
repurchases.  Net cash used in financing  activities  increased  $5.3 billion in
1997 compared to 1996. During 1997, GM used $3.8 billion to acquire 63.5 million
shares of $1-2/3 par value common stock. GM also used approximately $600 million
to  repurchase  shares of $1-2/3 par value  common  stock for  certain  employee
benefit plans during 1997. Also in 1997, net cash flows used in association with
changes in long-term debt increased by approximately  $1.8 billion compared with
1996 and reflected a combination  of refinancing  and retirement  using GM's new
commercial  paper  program  and cash  received  in  connection  with the  Hughes
Transactions.

Financing and Insurance Operations
----------------------------------

   Cash provided by operating  activities  during 1998 totaled $5.6 billion,  an
increase from the $4.0 billion and $4.2 billion  provided  during the comparable
1997 and 1996 periods,  respectively.  The  additional  operating  cash flow was
primarily the result of increased mortgage activity.
   Cash  used for  investing  activities  during  1998  totaled  $22.6  billion,
compared with $12.1 billion and $6.5 billion during the same periods in 1997 and
1996,  respectively.  Cash usage  increased  primarily  as a result of lower net
finance  receivable  activity  and a  decrease  in sales of  retail  receivables
proceeds.
   Cash  provided by financing  activities  during 1998 totaled  $17.7  billion,
compared  with $8.3  billion  and $2.6  billion of cash  provided  by  financing
activities during the comparable 1997 and 1996 periods, respectively. The change
is  primarily  the result of increases  in short- and  long-term  debt and lower
dividends paid to GM.

Dividends

   Dividends  may be paid on common  stocks only when, as and if declared by the
GM Board in its sole discretion.  GM's policy is to distribute  dividends on its
$1-2/3 par value common stock based on the outlook and  indicated  capital needs
of the  business.  In  January  1999,  the GM Board  declared a  quarterly  cash
dividend of $0.50 per share on $1-2/3 par value common stock,  payable March 10,
1999. The GM Board also declared quarterly  dividends on the Series B, Series D,
and  Series  G  Depositary  Shares  of  $0.57,  $0.495,  and  $0.57  per  share,
respectively,  payable May 1, 1999. With respect to Class H common stock,  which
was recapitalized on December 17, 1997, the GM Board determined that it will not
pay any cash  dividends at this time in order to allow the earnings of Hughes to
be retained for investment in its telecommunications and space businesses.

Health Care Expense and Other Postretirement Benefits

   The cost of  postretirement  medical,  dental,  vision,  and  life  insurance
benefits  provided to retirees and eligible  dependents  are  recognized  in the
consolidated  financial  statements during the period in which employees provide
services to GM. Costs for medical,  dental,  vision, and life insurance benefits
provided  to  employees   during   active   service  are  expensed  as  incurred
(pay-as-you-go).  The components of postretirement  benefits  expense,  the U.S.
health care cost, and cash  expenditures for GM's U.S.  operations are set forth
below (excluding cash expenditures for Hughes' and former Hughes' non-automotive
employees, but including GMAC).
     GM is  committed  to  reducing  the burden of  continuing  health care cost
increases.  During 1997, GM elected to pre-fund part of its other postretirement
benefits  liability by creating a VEBA trust to which it  contributed $3 billion
of its cash reserves.  In 1998, GM contributed an additional $1.7 billion to and
paid $375  million in  benefits  from the VEBA  trust.  The VEBA  assets had the
effect of reducing GM's  postretirement  benefits  liability on the consolidated
balance sheet.

                                    - 16 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Health Care Expense and Other Postretirement Benefits (concluded)

                                           Year Ended December 31, 1998
                                           ----------------------------
                                       Postretirement   Health    Pay-As-You-Go
                                          Benefits     Care Cost      Cost*
                                          --------     ---------      -----
                                                (Dollars in Millions)
GM U.S. operations health care
   Postretirement medical, dental, 
     and vision                           $2,829        $2,829          $ -
   Retired employees pay-as-you-go             -             -        2,012
   Active employees pay-as-you-go              -         1,717        1,717
                                           -----         -----        -----
      Total health care                    2,829        $4,546       $3,729
                                           -----
   Life insurance                            449
   Other subsidiaries - health care 
     and life insurance                      193
                                           -----
      Total postretirement benefits 
        expense                            3,471
   Less amounts allocated to discontinued
         operations                          966
                                           -----
      Postretirement benefits expense for
         continuing operations            $2,505
                                           =====

*  Pay-as-you-go  amounts for 1997 were $1.9 billion for retirees,  $1.7 billion
for active employees, and $3.6 billion in total.

     The master  separation  agreement between Delphi and GM provides in general
that GM will retain other postretirement benefit liabilities related to Delphi's
U.S. salaried employees retiring on or prior to January 1, 1999. The liabilities
related to Delphi's U.S. salaried active and inactive  employees  retiring after
January 1, 1999 will be assumed by Delphi.  Delphi's U.S. hourly  employees will
continue to participate in the  postretirement  plans  administered  by GM until
full  separation  from GM, and GM generally will retain  postretirement  benefit
obligations for U.S. hourly employees  retired on or before October 1, 1999. The
amount  of  postretirement   benefits  expense  allocated  to  Delphi  for  1998
approximates $1.0 billion.  Additional  information  related to employee benefit
arrangements affected by the Delphi separation can be found in Note 23 to the GM
consolidated financial statements as filed on April 15, 1999 on a Form 8-K dated
April 12, 1999.
   GM has disclosed in its  consolidated  financial  statements  certain amounts
associated with estimated future postretirement benefits other than pensions and
classified such amounts as  "accumulated  postretirement  benefit  obligations,"
"liabilities," or "obligations."  Notwithstanding  the recording of such amounts
and the use of these terms, GM does not admit or otherwise acknowledge that such
amounts or existing  postretirement  benefit  plans of GM (other than  pensions)
represent legally enforceable liabilities of GM.

GM Card

   GM sponsors a credit card program,  entitled the GM Card  program,  which was
introduced in the U.S. in September 1992 and subsequently in Canada,  Australia,
Brazil,  Mexico,  Chile and the United Kingdom.  A cardholder's  use of the card
generates  entitlements  to  rebates  that  can be used in  connection  with the
cardholder's purchase or lease of a new GM vehicle.
   As the sponsor of the GM Card program,  GM does not provide  consumer credit.
The program is used as a marketing tool to increase  product sales.  Independent
banks  issue the GM Card and are  responsible  for  evaluating,  extending,  and
funding credit to the cardholders, and are fully responsible for any credit card
losses with no recourse against GM.
   In the U.S., GM Card rebates accumulate at a rate equal to 5% of all spending
for goods or services  charged on the GM Card up to a maximum  rebate  amount of
$500 per year.  The rebates,  which  expire in 7 years,  may be applied over and
above all sales  allowances  in the  market at the time of vehicle  purchase  or
lease. GM is solely  responsible to cardholders  for rebates.  Provisions for GM
Card rebates are recorded as  reductions in revenue at the time of vehicle sale.
GM has the right to prospectively modify the plan.
   Rebates  redeemed  worldwide  during 1998,  1997, and 1996 were $705 million,
$656  million,  and $443 million,  respectively.  Cardholder  rebates  available
worldwide for future redemption when the cardholder purchases or leases a new GM
vehicle  amounted to $3.7  billion  and $3.5  billion  (net of deferred  program
income) at December 31, 1998 and 1997, respectively. GM anticipates that profits
from incremental  sales resulting from the GM Card program,  along with deferred
program income, will more than offset future rebate costs associated with the GM
Card.

                                    - 17 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Deferred Income Taxes

   At December 31, 1998, GM's consolidated balance sheet included a net deferred
tax asset of  approximately  $17.8  billion  related  to net  future  deductible
temporary  differences (see Note 6 to the GM consolidated  financial statements)
in the  United  States  of which  approximately  $13.8  billion  related  to the
obligation for postretirement  benefits other than pensions.  Realization of the
net deferred tax asset is dependent  upon  profitable  operations  in the United
States and future reversals of existing taxable temporary differences.  Although
realization  is not  assured,  GM believes  that it is more likely than not that
such benefits will be realized  through the reduction of future taxable  income.
Management has carefully considered various factors in assessing the probability
of realizing this deferred tax asset including:
   .  The  operating  results of GMNA over the most recent three year period and
      overall  financial  forecasts of book and taxable income for the 1999-2003
      period.  Further  improvements  are  expected  by  continuing  efforts  to
      maintain  GM's  competitiveness,  including  actions  relating to reducing
      material costs through global sourcing and increasing  efficiency  through
      lean manufacturing.
   .  Operating results of GMAC and Hughes which generated U.S. pre-tax
      income of approximately $1.8 billion, $3.3 billion, and $3.1 billion in
      1998, 1997, and 1996, respectively.
   .  The ability to utilize tax planning,  such as  capitalization  of research
      and experimentation  costs for tax purposes, so that GM does not have, and
      does not expect to  generate  in the near  future,  any  significant  U.S.
      federal tax net operating loss carryforwards.
   .  The extended period of time over which the tax assets can be utilized.
      Postretirement benefits become tax deductions over periods up to 50
      years.
   .  The fact that GM has never lost deferred federal tax assets due to the
      expiration of a U.S. net operating loss carryforward.
   Dividends  received  from  foreign  operations  for U.S.  federal  income tax
purposes totaled  approximately $3.1 billion,  $2.6 billion, and $1.0 billion in
1998, 1997, and 1996, respectively.

Pensions

   At December 31, 1998,  GM's total  worldwide  net unfunded  pension  position
increased  to $6.3  billion  ($1.2  billion  for the U.S.  automotive  qualified
hourly/salary  plans and $5.1 billion for all other plans  worldwide)  from $5.0
billion a year ago ($0.5 billion for the U.S. automotive qualified hourly/salary
plans and $4.5 billion for all other plans  worldwide).  The predominant  factor
contributing  to the  increase in the unfunded  position of the U.S.  automotive
qualified  hourly/salary plans was a 25 basis point decline in the discount rate
used to measure  the  pension  obligation  at the end of 1998  compared  to 1997
(6.75% and 7.00%,  respectively).  During  1998 and 1997,  GM  contributed  $1.1
billion  and $1.5  billion in cash,  respectively,  to its U.S.  hourly  pension
plans.
   On an economic basis, GM continues to maintain a fully-funded  status for its
U.S.  hourly and salaried  pension  plans as of December 31, 1998.  The economic
basis of measuring the U.S. hourly and salaried pension  liability  differs from
the Statement of Financial Accounting Standards (SFAS) No. 87 basis,  Employers'
Accounting  for  Pensions,  required by GAAP,  but GM believes it to be a better
measure of GM's ongoing  economic  exposure for pension  obligations and as such
uses this as a measure  to  determine  its funded  status.  The  economic  basis
discounts  pension  liabilities at the long-term  asset earnings rate assumption
(currently 10.0%) rather than at a variable, year-end market rate as required by
SFAS No. 87  (currently  6.75%).  In periods of low  interest  rates,  as in the
current market environment,  the SFAS No. 87 liability will generally exceed the
liability  calculated on an economic basis,  whereas in periods of high interest
rates  the  economic  basis  liability  will  generally  exceed  the SFAS No. 87
liability.
   The master separation agreement between Delphi and GM provides generally that
pension plan assets and liabilities related to Delphi's U.S. salaried active and
inactive  employees  retiring  after  January 1, 1999 will be assumed by Delphi.
Delphi has established  defined benefit pension plans for its salaried employees
under the same  terms  that  existed  for the GM plans as of  January  1,  1999.
Delphi's financial data classified as discontinued operations reflect the assets
and  liabilities  related to U.S.  salaried  employees  that  Delphi will assume
pursuant  to the master  separation  agreement,  and  exclude  employee  benefit
obligations  and  assets  related  to  salaried  employees  retired on or before
January 1, 1999.  Generally,  Delphi's U.S.  hourly  employees  will continue to
participate in the defined benefit pension plan for hourly workers  administered
by GM until full separation from GM.  Generally,  Delphi will assume the pension
obligations  for U.S.  hourly  employees who retire after October 1, 1999 and GM
will retain  pension  obligations  for U.S.  hourly  employees  who retire on or
before  October 1, 1999.  The amount of such  obligations  varies  depending  on
factors such as discount  rates,  asset returns,  contribution  levels and other
factors.  The  obligation  attributable  to Delphi  classified  as  discontinued
operations  was $2.1  billion and $1.7  billion at  December  31, 1998 and 1997,
respectively.  Additional  information related to employee benefit  arrangements
affected by the Delphi separation can be found in Note 23 to the GM consolidated
financial  statements  as filed on April 15,  1999 on a Form 8-K dated April 12,
1999.

                                    - 18 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Environmental Matters

   GM is subject to various laws relating to the  protection of the  environment
including laws regulating air emissions, water discharges, waste management, and
environmental  cleanup.  GM is also  in  various  stages  of  investigation  and
remediation for sites where contamination has been alleged.
   The liability  for worldwide  environmental  cleanup was  approximately  $500
million and $590 million at December 31, 1998 and 1997, respectively.  In future
periods,  new  laws  or  regulations,   advances  in  technologies,   additional
information  about the ultimate remedy  selected at new and existing sites,  and
GM's  share  of the  cost of  such  remedies  could  significantly  change  GM's
estimates.
   The process of estimating such liabilities is complex and dependent primarily
on the nature and extent of historical information and physical data relating to
a contaminated  site,  the  complexity of the site,  the  uncertainty as to what
remedy  and  technology  will be  required,  the  outcome  of  discussions  with
regulatory  agencies  and  other  potentially   responsible  parties  (PRPs)  at
multi-party sites, and the number and financial viability of other PRPs.
   In 1998,  1997,  and 1996,  GM expensed  $72 million,  $63  million,  and $68
million, respectively,  for environmental investigation,  remediation, and waste
management.   In  addition,   worldwide  capital   expenditures,   as  discussed
previously,  included $83 million,  $91 million,  and $99 million in 1998, 1997,
and 1996, respectively, for various environmental matters.

Euro Conversion

   On January 1, 1999,  eleven of fifteen member countries of the European Union
established fixed conversion rates between their existing currencies and adopted
the euro as their new common currency. The euro trades on currency exchanges and
the legacy currencies  remain legal tender in the participating  countries for a
transition  period until  January 1, 2002.  Beginning  on January 1, 2002,  euro
denominated  bills  and coins  will be  issued  and  legacy  currencies  will be
withdrawn from circulation.
   GM has  established  plans to assess and address the impact to GM as a result
of the euro  conversion.  The  introduction  of the euro on  January 1, 1999 has
increased the pace of price harmonization  throughout Europe. GM has developed a
comprehensive  program to identify,  analyze and  determine the best strategy to
address this price  harmonization.  GM is  analyzing  all aspects of its pricing
strategy to minimize any potential risk of this pricing harmonization.
   In addition, the Corporation has reviewed and has made required modifications
to applicable  information  technology  systems and  contracts  based on the new
currency.
   GM  believes  the  introduction  of the euro does not have any  material  tax
consequences,  and also believes it reduces its overall foreign exchange risk as
the number of currencies in which it transacts is now reduced.
   GM believes that the euro conversion will not have a material  adverse impact
on its financial position or results of operations.

Employment

Worldwide employment at December 31, (in thousands)
                                                 1998        1997       1996(1)
                                                 ----        ----       -------
  GMNA                                            226         237         245
  GME                                              84          79          79
  GMLAAM                                           24          27          23
  GMAP                                             10          10           9
  GMAC                                             24          21          18
  Hughes                                           15          14          12
  Other                                            13          10           8
                                                 ----        ----       -----
    Total employees                               396         398         394
                                                  ===         ===         ===

(1) Amounts  have been  adjusted to reflect  the changes to GM's  organizational
    structure  resulting from the  restructuring of former Hughes which occurred
    in December 1997. As such,  Delphi adjusted amounts include Delco and Hughes
    adjusted amounts exclude Delco and Hughes Defense.

                                    - 19 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

New Accounting Standards

   In the first  quarter of 1998,  the AICPA's  Accounting  Standards  Executive
Committee issued  Statement of Position (SOP) 98-1,  Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use. This SOP requires that
entities  capitalize certain  internal-use  software cost once specific criteria
are met.  Currently,  GM generally expenses the costs of developing or obtaining
internal-use software as incurred. GM will adopt SOP 98-1 on January 1, 1999, as
required. GM expects that under the new SOP,  approximately $260 million to $320
million in spending will be  capitalized  in 1999 that would have otherwise been
expensed.
   In the second  quarter of 1998,  the  Financial  Accounting  Standards  Board
issued Statement of Financial  Accounting  Standards (SFAS) No. 133,  Accounting
for  Derivative  Instruments  and Hedging  Activities.  SFAS No. 133 requires an
entity to recognize  all  derivatives  as either assets or  liabilitiies  in the
statement of financial  position and measure  those  instruments  at fair value.
Gains or losses resulting from changes in the values of those  derivatives would
be accounted for depending on the use of the derivative and whether it qualifies
for hedge  accounting.  GM plans to adopt SFAS No.  133 by  January 1, 2000,  as
required.  GM is  currently  assessing  the  impact  of this  Statement  on GM's
consolidated financial statements.

Forward-Looking Statements

   Following are the principal  important factors which may cause actual results
to differ materially from those expressed in forward-looking  statements made by
the managements of GM, Hughes and Delphi:

   . Changes in economic  conditions,  currency  exchange  rates,  or  political
     stability in the major markets  where the  corporation  procures  material,
     components,  and supplies for the  production of its principal  products or
     where its products are produced, distributed, or sold (i.e., North America,
     Europe,  Latin America and Asia-Pacific),  including the effects of current
     economic problems in Asia and political problems in the Far East.
   . Shortages  of  fuel  or  interruptions  in  transportation  systems,  labor
     strikes,  work stoppages,  or other interruptions to or difficulties in the
     employment of labor in the major markets  where the  corporation  purchases
     material,  components,  and supplies for the  production of its products or
     where its products are produced, distributed or sold.
   . Significant  changes in the  competitive  environment  in the major markets
     where the corporation  purchases material,  components and supplies for the
     production of its products or where its products are produced, distributed,
     or sold.
   . Changes  in  the  laws,  regulations,   policies  or  other  activities  of
     governments,  agencies  and similar  organizations  where such  actions may
     affect the production, licensing, distribution or sale of the corporation's
     products, the cost thereof or applicable tax rates.
   . The ability of the corporation to achieve reductions in cost and employment
     levels,  to  realize  production  efficiencies,  and to  implement  capital
     expenditures, all at the levels and times planned by management.
   . With respect to Hughes,  additional  risk factors  include:  the ability to
     achieve subscriber growth in its Direct-To-Home  businesses, the ability to
     sustain  technological  competitiveness,  the possible  failure or delay of
     planned satellite launches,  access to capital and financial flexibility in
     order  to take  advantage  of new  market  opportunities,  the  ability  to
     complete strategic acquisition of businesses and assets, and the ability to
     respond to  competitive  pressures and react quickly to other major changes
     in the marketplace.

                                 * * * * * *

                                    - 20 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Quantitative and Qualitative Disclosures About Market Risk

   GM is exposed to market risk from changes in foreign currency exchange rates,
interest rates and certain  commodity and equity  security  prices.  In order to
manage  the risk  arising  from  these  exposures,  GM enters  into a variety of
foreign exchange, interest rate, and commodity forward contracts and options.
   A discussion  of GM's  accounting  policies  for  derivative  instruments  is
included  in Note 1 to the GM  consolidated  financial  statements  and  further
disclosure is provided in Notes 10, 11, and 12 to the GM consolidated  financial
statements.
   GM maintains risk management  control  systems to monitor  foreign  exchange,
interest rate,  commodity and equity price risks,  and related hedge  positions.
Positions  are  monitored  using a variety of  analytical  techniques  including
market value,  sensitivity  analysis,  and value-at-risk  models.  The following
analyses are based on  sensitivity  analysis  tests which assume  instantaneous,
parallel shifts in exchange rates, interest rate yield curves, and commodity and
equity prices.  For options and  instruments  with  non-linear  returns,  models
appropriate   to  the  instrument  are  utilized  to  determine  the  impact  of
sensitivity shifts.

Foreign Currency Exchange Rate Risk
   GM has foreign currency exposures related to buying,  selling,  and financing
in  currencies  other  than the  local  currencies  in which it  operates.  More
specifically,  GM is exposed to foreign  currency risk related to uncertainty to
which  future  earnings  or assets  and  liability  values  are  exposed  due to
operating cash flows and various  financial  instruments that are denominated in
foreign  currencies.  GM's most significant foreign currency exposures relate to
Canada, Mexico,  Western European countries (primarily Germany,  United Kingdom,
Spain, Italy, Belgium and France),  Australia,  Japan and Brazil. As of December
31, 1998 and 1997, the net fair value  liability of financial  instruments  with
exposure  to foreign  currency  risk was  approximately  $3.5  billion  and $1.9
billion,  respectively.  The  potential  loss in fair  value for such  financial
instruments  from a hypothetical  10% adverse change in quoted foreign  currency
exchange rates would be approximately $161 million and $190 million for 1998 and
1997, respectively.
   The model assumes a parallel shift in the foreign  currency  exchange  rates.
Exchange rates rarely move in the same  direction.  The assumption that exchange
rates change in a parallel fashion may overstate the impact of changing exchange
rates on assets and liabilities denominated in a foreign currency.

Interest Rate Risk
   GM is subject to market risk from exposure to changes in interest rates based
on its financing,  investing,  and cash  management  activities.  GM enters into
various  financial  instrument  transactions  to maintain  the desired  level of
exposure  to the risk of interest  rate  fluctuations  and to minimize  interest
expense. More specifically, General Motors Acceptance Corporation (GMAC) and its
affiliates  have also entered into  contracts to provide  commercial  and retail
financing,  retain  mortgage  servicing  rights,  and to retain  various  assets
related to mortgage  securitization.  Certain  exchange traded future and option
contracts,  interest rate caps and floors, along with various investments,  have
been entered into to reduce the interest  rate risk related to these  activities
and manage  potential  prepayment  activity  associated with mortgage  servicing
rights. The GMAC Mortgage Group (GMACMG) manages prepayment risk associated with
its  capitalized  mortgage  servicing  rights  with U.S.  Treasury  options  and
futures. Since the derivative instruments do not have identical  characteristics
to the underlying mortgage servicing rights, GM is exposed to basis risk. GMACMG
mitigates  this risk  through a  historical  review of value  change in  various
interest rate scenarios when establishing and maintaining its hedge program.  As
of December 31, 1998 and 1997,  the net fair value  liability  of all  financial
instruments  held for purposes other than trading with exposure to interest rate
risk was  approximately  $15.9  billion  and  $3.7  billion,  respectively.  The
potential  decrease in fair value  resulting  from a  hypothetical  10% shift in
interest rates would be approximately  $90 million and $214 million for 1998 and
1997,  respectively.  The net fair value asset of all financial instruments held
for trading purposes with exposure to interest rate risk was approximately  $3.2
billion and $2.1 billion for 1998 and 1997, respectively.  The potential loss in
fair value  resulting from a  hypothetical  10% shift in interest rates would be
approximately $84 million and $43 million for 1998 and 1997, respectively.
   The SEC disclosures on market risk require that all financial instruments, as
defined  by  Statement  of  Financial   Accounting  Standards  (SFAS)  No.  107,
Disclosures about Fair Value of Financial Instruments, should be included in the
quantitative  disclosure  calculation.  Operating  leases are not required to be
disclosed  by  SFAS  No.  107,  and  have  not  been  presented  as  part of the
sensitivity  analysis.   This  is  a  significant  limitation  to  the  analysis
presented.  While the sensitivity  analysis will show a fair market value change
for the debt which funds GM's operating lease portfolio,  a corresponding change
for GM's operating lease portfolio,  which had a book value of $37.1 billion and
$33.7 billion as of December 31, 1998 and 1997, respectively, was not considered
by the  model.  As a result,  the  overall  impact to the fair  market  value of
financial  instruments  from a  hypothetical  change  in  interest  rates may be
overstated.

                                    - 21 -

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

Interest Rate Risk (concluded)
   There  are  certain   shortcomings   inherent  to  the  sensitivity  analyses
presented.  The model assumes interest rate changes are  instantaneous  parallel
shifts in the  yield  curve.  In  reality,  changes  are  rarely  instantaneous.
Although  certain assets and liabilities may have similar  maturities or periods
to repricing,  they may not react  correspondingly to changes in market interest
rates.  Also, the interest rates on certain types of assets and  liabilities may
fluctuate with changes in market interest  rates,  while interest rates on other
types of assets may lag behind changes in market rates.  Finance receivables are
less susceptible to prepayments when interest rates change, while prepayments on
many mortgage related  instruments are directly affected by a change in interest
rates.  As such,  GM's model does not  address  prepayment  risk for  automotive
related  finance  receivables,  but does consider  prepayment  risk for mortgage
related  instruments that are highly sensitive to prepayment risk.  However,  in
the event of a change in interest  rates,  actual loan  prepayments  may deviate
significantly from assumptions used in the model. Further,  certain assets, such
as adjustable rate loans, have features,  such as annual and lifetime caps, that
restrict  changing  the interest  rates both on a short-term  basis and over the
life of the asset.  Finally,  the ability of certain borrowers to make scheduled
payments on their adjustable rate loans may decrease in the event of an interest
rate increase.

Commodity Price Risk
   GM enters into  commodity  forward and option  contracts.  Such contracts are
executed to offset GM's  exposure to the  potential  change in prices mainly for
various  non-ferrous metals used in the manufacturing of automotive  components.
The net  fair  value  liability  of such  contracts,  excluding  the  underlying
exposures,  as of December 31, 1998 and 1997 was approximately  $200 million and
$42 million,  respectively.  The potential change in the fair value of commodity
forward and option contracts,  assuming a 10% change in the underlying commodity
price, would be approximately $203 million and $111 million at December 31, 1998
and 1997, respectively.  This amount excludes the offsetting impact of the price
risk inherent in the physical purchase of the underlying commodities.

Equity Price Risk
   GM holds  investments in various  available-for-sale  equity securities which
are subject to price risk.  The fair value of such  investments,  as of December
31, 1998 and 1997 was approximately $1.2 billion and $899 million, respectively.
The  potential  change in the fair  value of these  investments,  assuming a 10%
change in prices  would be  approximately  $121 million and $90 million for 1998
and 1997, respectively.

Forward-Looking Statements
   The above discussion and the estimated amounts generated from the sensitivity
analyses  referred to above  include  forward-looking  statements of market risk
which assume for analytical  purposes that certain adverse market conditions may
occur.   Actual  future  market  conditions  may  differ  materially  from  such
assumptions because the amounts noted previously are the result of analyses used
for  the  purpose  of  assessing  possible  risks  and the  mitigation  thereof.
Accordingly, the forward-looking statements should not be considered projections
by GM of future events or losses.

                                 * * * * * *

                                    - 22 -

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                            GENERAL MOTORS CORPORATION
                                            --------------------------
                                                    (Registrant)
Date    April 21, 1999
        -----------------
                                            By
                                            s/Peter R. Bible
                                            -------------------------------
                                            (Peter R. Bible,
                                             Chief Accounting Officer)

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