General Motors confirmed today that it has made a $2 billion contribution to its underfunded U.S. pension plans, giving it 60.6 million shares in common stock.
The payment, which GM previously announced it would make, adds to the $4 billion cash the Detroit automaker contributed to its pension plans last fall. The plans are underfunded $29.4 billion globally, a liability Chief Financial Officer Chris Liddell says he wants to wipe off the books over the next few years.
GM's U.S. pension plans, which cover about 688,000 U.S. hourly and salaried retirees, are underfunded by $17.1 billion.
"We continue to take the steps necessary to lower our risk profile, so our focus can be on designing, building and selling the world's best vehicles," Liddell said, in a statement this morning.
Liddell has said the company has made paying down debt a priority. GM wants a stronger balance sheet to weather sudden, sharp downturns in the marketplace without having to borrow large sums of money - a trend that sank the old GM into financial peril.
Once the $100 billion pension plans are fully funded, he said the company will move assets into less risky investments, such as bonds.
GM also said this week it will pump $7 billion into product engineering and development this year - up from $5 billion during bankruptcy - and keep it a constant level. Liddell said the company has wasted billions of dollars starting projects in good times, only to abandon them in tougher years.
GM reported profits of $4.2 billion for the first three quarters of 2010.
The automaker returned to the public markets Nov. 18 and its initial stock sale raked in $23.1 billion making it the world's largest IPO.
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