G.M. Suspends Dividend and Plans More Layoffs

[Mugu]

By NICK BUNKLEY and BILL VLASIC

DETROIT — General Motors said Tuesday that it would reduce labor costs for salaried workers by 20 percent, eliminate its quarterly dividend and further reduce truck production to ensure that it has enough cash to finance its turnaround for at least two more years.

The moves, which include selling at least $2 billion in assets and borrowing as much as $3 billion, are expected to raise about $15 billion by the end of 2009, the chief executive Rick Wagoner said.

Mr. Wagoner said the automaker would stop providing health care coverage to salaried retirees at age 65, offer buyout and early retirement packages to reduce its salaried work force and freeze base pay for salaried employees through 2009.

In addition, G.M. executives will no longer receive discretionary cash bonuses.


General Motors CEO Rick Wagoner

http://www.nytimes.com/2008/07/16/business/16auto.html">Complete article

[raccoon]

1. Well, Hallelujah, praise Jesus.

"G.M. executives will no longer receive discretionary cash bonuses."

They're the ones whose head-in-arse decisions caused the company's current woes.



Only....are they just going to call it something else?

[no_hypocrisy]

2. In 1991 when GM also suspended its dividend payments, I predicted this

was a sign of an impending recession in my corporations class. When a major corporation doesn't share its wealth with its stockholders, it isn't a good sign, albeit it is good fiscal policy. Unfortunately I was correct about the recession.