GM Suspends 401(k) Match for Employees
DETROIT – General Motors Corp. (GM) is suspending contributions to its 401(k) retirement savings plan for salaried workers, a spokesman said on Thursday.
"We continue to monitor the business in determining when to reinstate the matching contributions," GM spokesman Robert Herta said.
The world's largest automaker was also dropping the requirement that up to 3 percent of worker's contributions and 100 percent of the automaker's contribution be invested in GM shares.
This was done to give employees more flexibility to choose their stocks and mutual funds, Herta said, adding that the changes take effect January 1.
GM now contributes 20 cents for each $1 that workers invest in the 401(k) plan up to 6 percent of an employee's base salary, Herta said. GM last year reduced its 401(k) match from 50 cents on the dollar to 20 cents.
GM's financial woes, combined with the bankruptcy filing of Delphi Corp. , its biggest suppler, have taken a toll on its once-robust stock price. GM shares have fallen 44 percent this year.
GM, which has lost nearly $4 billion this year, is struggling with high health-care and commodity costs, loss of U.S. market share to foreign rivals and slumping sales of its once-profitable sport utility vehicles.
To compound matters, GM's borrowing costs have soared since its credit rating was first cut to junk status in May. Standard & Poor's cut GM's ratings deeper into junk territory this week.