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                                PROMISSORY NOTE

                               December 21, 1999

AM General Corporation, (the "Maker") a Delaware corporation, located at 105
North Niles Avenue, South Bend, Indiana 46617, promises to pay to the order of
General Motors Corporation, (the "Payee") at its offices located at 3044 West
Grand Boulevard, Detroit, Michigan, 48202 in lawful money of the United States
of America, and in installments as hereinafter provided, the principal amount
set forth on Attachment A hereto, together with interest, at the rate of "zero"
percent ( 0%) per annum, on the unpaid balance. In the event the parties
mutually agree in writing to utilize a repayment methodology different from the
direct off-set to the Assembly Fee as contemplated in the New Vehicle Assembly
Agreement, all past due principal on this Note shall bear interest from maturity
thereof until paid, at the maximum rate permitted by law.

Principal and interest, if any, on this Note shall be payable in accordance with
the schedule set forth in Attachment B hereto, with each payment applied first
to accrued but unpaid interest, if any, and second to principal.  Unless
otherwise mutually agreed by Maker and Payee in writing,  payments shall be made
as direct off sets to the assembly fee setforth in the New Vehicle Assembly
Agreement between AM General Corporation and General Motors Corporation dated
December 21, 1999.

Notwithstanding anything elsewhere to the contrary and subject to the provisions
of the Equity Conversion Agreement between General Motors Corporation and AM
General Corporation dated , December 21, 1999, Maker shall have the right and
privilege of prepaying all or any part of this Note at any time without notice,
additional interest or penalty. Partial prepayment shall not excuse the payment
of the next installment otherwise due hereunder, but shall only reduce the
number of such installments required hereby, as appropriate.  The parties
acknowledge, however, that AM General Corporation shall have no obligation to
pay off this Note in cash other than through the direct off set to the assembly
fee referenced above, unless otherwise mutually agreed by the parties in
writing.

This Note is secured by a Security Agreement executed by AM General Corporation,
a Delaware corporation , in favor of General Motors Corporation, hereof, and
executed simultaneously herewith.

In the event the parties mutually agree in writing to utilize a repayment
methodology different from the direct off-set to the Assembly Fee as
contemplated in the New Vehicle Assembly Agreement, it is expressly agreed that
upon default in payment of any one or more of the said installments, which
default shall extend over a period of more than ten (10) days, then all
subsequent installments on this Note shall at once become due and payable at the
option of the Payee without demand or notice, demand and notice being hereby
expressly waived.  Default shall be limited to, the failure of the Maker to pay
any installment of principal or interest, if any, when due, or a default under
the terms of the above-mentioned security agreement.

Maker and all sureties, endorsers and guarantors of this Note, if any, waive
demand, presentment for payment, notice of nonpayment, protest, notice of
protest, and all other notice, filing of suit and diligence in collecting this
Note or enforcing any of the security herefor, and agree to any substitution,
exchange or release of any such security or the release of any party primarily
or secondarily liable hereon and further agrees that it will not be necessary
for any holder hereof, in order to enforce payment by it of this Note to first
institute suit or exhaust its remedies against any others liable herefor, or to
enforce its rights against any security herefor, and consent to any extensions
or postponements of time of payment of this Note or any other indulgences with
respect hereto, without notice thereof to any of them.

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Any failure or delay on the part of Payee in exercising any such right, remedy
or power, or abandonment or discontinuance of steps to enforce the same, shall
not operate as a waiver thereof or affect Payee's right thereafter to exercise
the same, and any single or partial exercise or any such right, remedy or power
shall not preclude any other or further exercise thereof or the exercise of any
other right, remedy or power.

If this Note is collected by suit or through Bankruptcy Court or any judicial
proceeding, or if this Note is not paid at maturity, however such maturity may
arise, and it is placed in the hands of any attorney for collection, then the
Maker agrees to pay for all costs, expenses, reasonable attorneys' fees, and
legal expenses which are incurred in addition to all amounts owing hereunder.

This Note is made and delivered in and it shall be governed by the laws of the
State of Michigan.

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its
authorized representative this 21st day of December, 1999.

                             AM General Corporation

                        By:_____________________________

                        Title:__________________________



ATTEST:

_____________________
Secretary


STATE OF            )
                    ) SS:
COUNTY OF           )

On December 21, 1999, before me _____________________________, a Notary Public
in and for said state, personally appeared ______________________________,
_______________ of AM GENERAL Corporation, known to me to be the person who
executed the within Promissory Note in behalf of said Corporation and
acknowledged to me that he/she executed the same for the purposes therein
stated.


               _______________________________
                    Notary Public

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