General Motors Corp., New York, expects its pension plan for hourly employees to report a $9.1 billion shortfall in 2001 because pension assets were down 5.7% last year instead of the 10% target rate of return, CFO John Devine told investors today. As a result, the automaker expects to take a $1.37-per-share hit to its pre-tax earnings in 2003, when it anticipates contributing about $2 billion to the pension plan for hourly employees to avoid paying higher pension insurance premiums to the PBGC, he said. The pension plan had a $1.7 billion surplus on its books at the end of 2000.
GM’s combined hourly and salaried retirement plans have a combined $64.6 billion in assets.
The company also announced today that it is cutting back its matching contribution to the 401(k) plan to 20 cents for every $1 employees contribute, down from 60 cents for every $1, Mr. Devine said.
