General Motors announces asset sales
General Motors Corporation announced that it plans further salaried
headcount reductions in the U.S. and Canada in the 2008 calendar year,
which will be achieved through normal attrition, early retirements,
mutual separation programs and other separation tools.
Affected retirees and surviving spouses will receive a pension
increase from the Company's over funded U.S. salaried plan to help
offset costs of Medicare and supplemental coverage.
And there will be no new base compensation increases for U.S. and
Canadian salaried employees for the remainder of 2008 and 2009.
These benefit changes, salaried headcount reductions and other
related savings will result in an estimated reduction in cash costs of
more than 20%, or $1.5 billion in 2009. Additional structural cost
reductions of approximately $2.5 billion are expected in GM North
America.
The Company's Board of Directors has decided to suspend future
dividends on common stock, effective immediately, which is expected to
improve liquidity by approximately $800 million through 2009. In
addition to the operating changes and other actions, the Company expects
to raise additional liquidity of $4-$7 billion through asset sales and
financing activities.
The Company is undertaking a broad global assessment of its assets
for possible sale or monetization, which is expected to generate
approximately $2-$4 billion of additional liquidity. The Company is
targeting at least $2-$3 billion of financing.
General Motors Corporation announced a additional structural cost
reductions of approximately $2.5 billion are expected in GM North
America (GMNA).
The reductions will be partially achieved through further adjustments
in truck capacity and related component, stamping and powertrain
capacity in response to lower U.S. industry volume.
Truck capacity is expected to be reduced by 300,000 units by the end
of 2009, half of which is from acceleration of prior announced actions,
and half from new capacity actions.
According to Reuters Estimates, analysts on average are expecting the
Company to report net loss of $(1.344) billion for the same period.
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