GM Plans To Reduce Pension Burden By $26 Billion

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Via BBC News

US car giant General Motors (GM) has announced plans to reduce its pension obligations by $26bn (£17bn) by offering tens of thousands of retiring workers lump-sum payments.

The firm will also contract Prudential Financial to run ongoing pensions.

It said it would take a hit of $2.5bn to $3.5bn in its accounts in the second half of the year due to the changes.

GM’s current pension plans are under-funded and have hindered the carmaker’s recent recovery.

“These actions represent a major step toward our objective of de-risking our pension plans and will further strengthen our balance sheet and give us more financial flexibility,” said Dan Ammann, GM’s chief financial officer.

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Article courtesy bbc.co.uk

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