General Motors Corp. has reduced its projected employee pension obligation by $3.9 billion, or about 4.4 percent, because 34,400 hourly workers took early retirement or buyout offers and because of reduced benefits for white-collar workers, the company said Tuesday.
At the end of last year, GM's projected pension obligation was $89 billion. In a statement filed with the Securities and Exchange Commission, GM said Tuesday that has been reduced to about $85 billion due to the changes, which took place in the first and second quarters of this year.
GM, like its domestic counterparts, is trying to reduce its pension and health care costs to match foreign automakers, which generally have a younger work force and aren't saddled with the same expenses.
The company's statement also said the buyouts reduced its obligation for retiree health care by $19.3 billion.
The reduced obligations are due in part to the 4,400 workers who took buyouts to leave without getting their full pensions. Plus, the remaining work force will stay on the job longer, further reducing pension obligations, the statement said.
Last month, GM reported that it would take a $3.7 billion charge due to the early retirements and buyouts. The company will take another $300 million charge next quarter to reflect health care costs due to the hourly employees' early retirements, said GM spokeswoman Brenda Rios.
Jonathan Steinmetz, an auto industry analyst with Morgan Stanley, said GM's SEC statement was "incremental and explanatory as compared to groundbreaking news."
GM shares fell 29 cents to close at $31.11 on the New York Stock Exchange.