GM moves to shore up finances

GM moves to shore up finances

DETROIT

General Motors Co. moved to strengthen its finances ahead of an initial public stock sale, announcing plans Thursday to cut debt and pension obligations by $11 billion.

The moves, including a big payment to U.S. taxpayers, are aimed at making the automaker’s balance sheet more attractive to potential investors who might buy GM stock in an offering expected next month.

The debt repayment is a huge milestone in GM’s comeback from a financial calamity that began in 2008 after years of billion-dollar losses. The auto giant, once a symbol of American industrial might, nearly ran out of money and needed bankruptcy and a huge government bailout to stay in business.

The $11 billion reduction includes paying back $2.1 billion owed to U.S. taxpayers, as well as paying $2.8 billion to a United Auto Workers health-care trust. The company also plans to put $6 billion in stock and cash toward its pension plans, which are underfunded by roughly $27 billion.

Associated Press