General MotorsGeneral Motors said today it's taking a number of steps to reduce its debt and pension liabilities. The Detroit automaker said it will repay $2.8 billion it owes to the United Auto Workers retiree health care trust, buy back $2.1 billion in preferred stock held by the federal government and make a contribution valued at $6 billion to its pension plans.

"These actions will bring down our leverage by $11 billion by reducing debt and improving our pension funding position," said Chris Liddell, GM vice chairman and chief financial officer.

Combined, the actions are expected to reduce interest and dividend costs by $500 million a year, GM said. The plan is contingent on GM's initial public offering, planned for next month.

The company has also secured a $5 billion, five-year line of credit from its lenders to provide backup liquidity, it said.

GM is owned 61% by the U.S. Treasury, following the company's descent into bankruptcy last year and subsequent restructuring. In its own statement today, Treasury said GM is repurchasing nearly 84 million preferred shares owned by the government.

On Tuesday, Ford Motor (F) said it reduced its indebtedness during the quarter, paying down its revolving credit line by $2 billion and prepaying its $3.6 billion debt obligation to the UAW retiree health care trust.

The actions reduced the Dearborn, Mich., company's debt to $26.4 billion as of Sept. 30. Ford officials said they expect the company to have net-zero debt by year's end, fully a year ahead of schedule.


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Kenny

The top blue collar jobs were paying more in the late 70s and 80s than they do know but top corporate management earnings have exploded like never before and you idiots still begrudge an auto worker his benfits. I knew fascism was on its way but by golly, I think its here. This comment is for all the fools who believe that social security is running at a deficit and don't realize that it is funded at a surplus and that beginning with Reagan, who borrowed from the social security fund to finance his tax cuts for the rich, money is regularly taken from social security and replaced with IOUs in the form of treasury bonds to finance other branches of govt. Do some research and tell me that I'm wrong.

October 31 2010 at 7:03 AM Report abuse rate up rate down Reply
Kenny

Has anybody here ever read a history book. Has anybody ever heard of the era of the Robber Barons. Does anybody have the slightest idea what abuses by big business prompted the rise of the labor movement. Does anybody know why we have child labor laws, a 40 hour work weak and an agency to inspect our food or why the government had to pass anti trust legislation. I swear to god, the ignorance out there is really scary. We've been so brainwashed over the past 30 years that the masses are now begging to be screwed by big business and make no mistake about it, they will screw us. A corporation's main and primary goal is to make a profit for its shareholders at the expense of all else. Our politicians are being bought out by these guys every day and if you listen to republicans and what they advocate, they've been bought out completely. Welcome to the wonderful world of fascism ladies and gentleman (look up the definition in a dictionary for those idiots out there who think socialism and fascism are the same thing).

October 31 2010 at 6:28 AM Report abuse +1 rate up rate down Reply
chris36m

I'm the mechanic that fixes car's for these clown's, we fix there "mistakes" daily and get NO PENSION, Pensions are what KILLED AMERICA!, get paid to lay around home till you DIE....BULLCHIT!! Work till I die is what will happen to me, there's no retiring at 50 anymore.

October 31 2010 at 6:05 AM Report abuse +1 rate up rate down Reply
ruthsgardens

You people need to get your head out of your ass.Obama didn't bail out the unions.You people spouting off about unions don't even know what they are.Unions are american workers who negotiated contracts with their employers.Thats right.They utilized their right under federal law to unionize for better wages,pensions and benefits.They sign a contract with their employer and is legal and binding.The autogroups tried to get loans from the banks but the banks always move their loans to toxic every election year.That is the only reason the autogroups were there in the first place.Second the Union only accompanied the autogroups to washington to insure the autogroups bargained in good faith.The unions contract is with the autogroups not Obama.If a company signs a contract with you and then says it can't pay you but it can pay millions to a ceo,how would you feel?Especially when you did the work? You people have it stuck in your head that unions are a big corporation or something.Or another party! Unions are american workers.Nevermind.You people are just management people downing the unions while you suck your way up the corporate ladder.

October 31 2010 at 4:43 AM Report abuse rate up rate down Reply
Debbie Penland !

BETCHA THE "HIGHER-UPS" WON'T BE "C-U-T" IN ANY WAY, THOUGH...AFTER ALL...OBAMA "PUMPED 'EM UP" BIG TIME REMEMBER...CAUSE THEY WERE "JUST TOO BIG TO F-A-I-L", RIGHT? THEY ALL GOT ENOUGH TO "SOCK AWAY SOME G-O-L-D" TO P-R-O-T-E-C-T THEMSELVES...WHILE ALL THE PEONS KEEP "PAYING THOSE BIG UNION DUES" TO "RETURN THE P-U-M-P-I-N-G UP FAVOR DURING E-L-E-C-T-I-O-N TIMES"!!! SUCH "SHEEPLE" DEMS ARE...WHILE THEY "RAIL" ABOUT "BIG OIL MAKING TOO MUCH" AND OTHER RIDICULOUS TOPICS THAT DON'T BEGIN TO EVEN "TRY TO MATCH WHAT THEY CONSTANTLY ACCUSE REPUBLICANS OF DOING"!!! AT LEAST UNDER REPUBLICANS THERE ARE "REAL JOBS" WITH "REAL PAYCHECKS" CONSTANTLY BEING PROVIDED...NOT SPINELESS, GOVERNMENT-CREATED, TAX-BURDENING "PLAY-JOBS-FOR-LIFE"!!!

October 31 2010 at 2:30 AM Report abuse +1 rate up rate down Reply
Tony

The unions are killing this Country. Obama Gave money to safe the Unions , but the company still will never be profitable again. I'm sure in another few years we will have to bail them out again.

October 31 2010 at 2:29 AM Report abuse -1 rate up rate down Reply
2 replies to Tony's comment
Kenny

You should do a little research and find out how labor was treated before the rise of the labor movement in the U.S. For you to say that unions are destoying this country simply shows ignorance of history. There is not enough time or space here to attempt to educate you. However leave it to the free market world economy and transnational corporations and I promise that what are now and once were middle class wages will fall to next to nothing. You'll be lucky if you can afford to buy food. The right has been demonizing labor unions since Reagan took office and fired the air traffic controllers and over the years they've managed to brainwash a legion of commonfolk into believing this garbage. The simple fact is we've entered into trade agreements that are effectively destoying the middle class and rewarding corporations with huge never before seen profits. Why do you think a company will announce a huge profit one fiscal period and then slash jobs the next day.

October 31 2010 at 6:07 AM Report abuse rate up rate down Reply
Doug

I agree. A lot of manufacturing jobs in the U.S. moved to China and Mexico and the unions are to blame. When a manufacturing company decides to shut down and move to China, I don't see the unions trying to save the jobs. For all you big union supporters out there, take a look and see what is going on over in Europe right now. The samething will happen here.

October 31 2010 at 7:00 AM Report abuse -1 rate up rate down Reply
notanaxkiller

The republicans won't like this....signs of a growing economy. Better get those democrats out before things get much better!

October 31 2010 at 1:49 AM Report abuse -1 rate up rate down Reply
jjmk13891

My father worked at GM for 30 years. He worked hard... and no one should be cheated out of their pension. That's just wrong. Innocent people shouldn't suffer because of the decisions of it's dumbass leaders. Obama is great for that bailout.. helped out thousands of worried families. All of this **** was happening when my mom passed away with cancer at 56 last year... health insurance went down the tube.. just wasn't good at all. Thank you Obama, but **** GM.

October 31 2010 at 1:10 AM Report abuse -2 rate up rate down Reply
SAUNDERS

HEY,isn't it odd how quickly GM came out of their problems? Our president backed wiping out the debt owed by GM to the banks and other creditors. By doing so he also wiped out any equity the shareholders had. Figure it out, now your and my 401K just lost considerable equity. But wait, they are profitable now, so had they not filed bankruptcy there would be a chance that everyone could recover something, but not the way OBAMA handled it. It's been less than two years and they are well again, makes one wonder doesn't it? It's called earning your way out of it!!!!!!! As for the Dividends that were mentioned, I think part of the government money was entitled to Dividents.

October 31 2010 at 1:01 AM Report abuse rate up rate down Reply
rustyspiano

What happened to "old" GM????????

October 31 2010 at 12:28 AM Report abuse -2 rate up rate down Reply