Corp. is suspending matching payments to employee 401(k) plans and will further scrutinize its white-collar workforce, as it seeks to cut costs and shore up its liquidity during a steep industry sales decline.
GM spokesman Tom Wilkinson confirms to Reuters a decision to stop matching pension benefits for salaried workers, effective Nov. 1, but says the contributions could resume if business conditions improve.
As GM’s financial losses have mounted in recent quarters, industry sales have plunged to a 13-year low, as a weak economy keeps buyers out of the showroom and a credit crisis pinches lending to those remaining in the vehicle market.
GM’s sales to date are down 17.8%. Industry-wide, deliveries have fallen 12.8%, according to Ward’s data. GM reports October sales on Nov. 3.
Over the last three years GM has lost roughly $51 billion. The auto maker is cutting costs with hopes of raising an additional $15 billion in cash by the end of 2009, an effort that includes a 15.0% reduction in salaried headcount, company officials have said.