GM injects $4 billion cash into pension funds

By Reuters
Posted Dec. 2, 2010 at 9:35 a.m.

General Motors said on Thursday that it made a $4 billion cash contribution to pension plans for its U.S.-based hourly and salaried workers.

The Detroit-based automaker, which went public again last month following a U.S. government-assisted bankruptcy reorganization, made a $2.7 billion contribution to a plan for its hourly workers and $1.3 billion for its salaried workers.

GM said in October that it would contribute at least $4 billion in cash and $2 billion in common stock to its pension funds for U.S. hourly and salaried workers.

“This pension contribution puts us another step closer to our goal of fully funding our pension plans and achieving minimal debt,” Chief Financial Officer Chris Liddell said in a statement Thursday.

As of year-end 2009, GM’s U.S. pension plans were underfunded by $17.1 billion. The company will update those figures in its 2010 annual filing to U.S. securities regulators, GM said in a release.

Untenable costs, shrinking revenue and the global recession forced GM and Chrysler Group LLC, the automaker now managed by Italy’s Fiat SpA, through government-funded bankruptcies last year.

The restructuring helped the automakers fortify their balance sheets and lower their break-even points. GM told investors last month that it sought to fully fund its pension accounts.

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