Automaker suspends dividend, announcing second restructuring in weeks
DETROIT - General Motors Corp. said Tuesday it will lay off salaried workers, cut truck production, suspend its dividend and borrow $2 billion to $3 billion to weather a severe downturn in the U.S. market.
GM said the moves will raise $15 billion to help cover losses and turn around its North American operations, including $10 billion from internal cost-cutting and $5 billion from selling some assets and borrowing against others.
GM’s shares fell as much as 6 percent to a new 54-year low of $8.81, then rebounded to $9.94 in midday trading, up 56 cents from Monday’s close.
Chief Operating Officer Fritz Henderson said GM wants to reduce its total salaried costs in the U.S. and Canada by more than 20 percent.
A large chunk of the reduction, he said, would come from cutting health care benefits for salaried retirees over age 65. Those people would get a pension increase from the company’s overfunded pension fund to help compensate for Medicare and supplemental insurance, the company said.