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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Generali | AQEU:GM | Aquis Europe | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 22.66 | 22.66 | 22.66 | 0.00 | 01:00:00 |
General Motors Corp. (GM), facing a shortfall in its once over-funded pension obligations, said Wednesday it is looking for ways to reduce what it owes retirees.
The auto maker, in requesting up to $16.6 billion in additional federal aid on Tuesday, warned it may need more money in 2013 and 2014 to cover pension shortfalls.
More than 650,000 U.S. salaried and hourly retirees draw a GM pension.
The auto maker's pension fund had a surplus in recent years but diminishing returns in weak financial markets, along with draws on the fund to cover restructuring, have diminished the reserves.
GM estimates its pension fund faced a $12.8 billion deficit in 2008, compared to a surplus of $20 billion in 2007.
Pension benefits for hourly and salaried workers amount to an $8 billion to $9 billion liability against the automaker's net present value, GM said in its request for aid.
"We need to have discussions with other governments to understand what our options are," GM Chief Financial Officer Ray Young said Wednesday in a conference call with analysts.
Young predicted many major companies will soon find themselves in the same pension predicament facing GM.
GM is hamstrung by legal obligations in the U.S. that require it to fulfill pension promises to hourly retirees. Instead, the auto maker will look to reduce its pension obligations to hourly workers in Canada. Already, the company froze pension benefits for U.S. salaried workers.
"You're limited on the levers you can pull," to relieve pension obligations, GM Chief Operating Officer Fritz Henderson said Wednesday in the conference call.
GM, surviving on $13.4 billion in federal loans received since December, on Tuesday said it could run out of money as soon as next month without additional aid.
Chrysler LLC, which received $4 billion in aid, asked for an addition $5 billion.
Ford Motor Co. (F) has not requested federal funds.
A sharp downturn in U.S. sales and economic gloom spreading around the world forced the auto maker to redraw a recovery plan submitted on Dec. 2, this time factoring in a bleaker economic outlook.
-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@dowjones.com.
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