General Motors Corp. announced a new wave of cost-cutting, aimed at stuffing criticism the company hasn’t moved fast enough to meet the challenges that contributed to $8.6 billion loss in 2005. Richard Wagoner, GM’s chairman and chief executive officer, said Tuesday GM intended to slash the dividend to common shareholders by 50 percent, cap defined-benefit pensions of existing salaried employees and put GM’s white-collar retirees on notice that they will have to cover the cost of future increases in health care. The salaries of GM’s top five executives and directors also were cut substantially as part of the reductions.
“We are now aggressively implementing a solid plan to turn around the North American business and restore overall profitability as quickly as possible,” said Wagoner, who in recent months has been trying to quash speculation that GM might be forced to seek bankruptcy protection. Wagoner, however, said he ruled an across the board pay cut for salaried workers, noting that GM’s pay levels are already at market levels.
In November, GM announced it was eliminating 30,000 blue-collar jobs by 2008.