Struggling GM Cuts Dividend, Pay, Benefits

February 8, 2006 9:30 AM, EST

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eneral Motors Corp., under fire from shareholders to raise its profits, said Tuesday it is cutting its yearly dividend in half to $1 a share and reducing the salaries of its chairman and senior executives, the Associated Press reported.

The automaker also plans to cut health benefits for retirees and evaluate ways to restructure its pension plan for U.S. workers, reducing costs to balance billions of dollars of losses in its North American automaking operations, AP said.

Besides cars, GM also makes light- and medium-duty trucks.

The dividend cut will reduce GM's yearly cash payout by about $565 million, AP reported.

“These are difficult decisions that involve sacrifices by our employees, stockholders, retirees and the senior leadership team,” GM Chairman and CEO Rick Wagoner said in a statement.

The announcements came a day after a top aide to billionaire investor Kirk Kerkorian was elected to GM's board, AP said.