GM workers, investors, retirees share pain

[Omaha Steve]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080716/AUTO01/807160410

Wednesday, July 16, 2008

Among other moves, GM to cut white-collar jobs, dividend and retiree health care.
Christine Tierney and David Shepardson / The Detroit News

General Motors Corp. Chairman and CEO Rick Wagoner is confident the company will have enough cash to get through a severe industry downturn this year and next, after announcing fresh cost cuts, further reductions in truck output and a suspension of its dividend.

The U.S. automaker will sell assets, halt executive cash bonuses and eliminate health care for some retirees, too, as part of a sweeping plan that affects virtually every GM constituency, from salaried workers to investors and even advertising agencies.

GM expects the measures to generate $15 billion in cash over the next year and a half, dispelling some of the concerns that have pummeled its stock recently.

"It's obviously an aggressive, proactive plan to what are pretty much unprecedented conditions in the U.S. market," Wagoner said Tuesday when he outlined the automaker's latest restructuring plan.

GM shares staged a modest rally in a declining market Tuesday, closing up 4.9 percent at $9.84 despite the dividend cut and a profit warning.

GM said it would report a "significant" second-quarter loss, on top of a $3.3 billion first-quarter loss, due to the market's weakness and the roughly $2 billion impact of the American Axle and other strikes.

But Wall Street analysts expressed reservations about the latest effort to keep GM on track in a rapidly shifting market and a weakening U.S. economy.

GM's shares had fallen from a recent high above $20 in May on concerns that GM might face a liquidity crunch next year or even bankruptcy because of a sudden and deep plunge in auto sales after gas prices hit $4 a gallon.

FULL story at link.

[JuniperLea]

1. I bet the execs don't get any cuts to their salaries...

or bonuses... just the workers.