GM CEO Takes Big Pay Cut

Automaker Cutting Dividend, Executive Salaries, Retiree Benefits

(CBS/AP) 
The world's largest automaker lost $8.6 billion in 2005 and is suffering from declining U.S. market share and rising health-care and pension costs. In November, GM announced plans to shed 30,000 jobs and close 12 facilities by 2008, but York has suggested that's not enough.

Most of the plant closures and job cuts must be negotiated with the United Auto Workers in 2007, when automakers and the union write a new contract. The UAW already agreed last year to require hourly workers and retirees at GM and Ford Motor Co. to pay more for their health care.

Wagoner said GM continues to work with the union on addressing competitiveness issues, but said Tuesday's announcement was not intended to send a message to the union.

"In my experience, we make the most progress in sitting down and working face-to-face," he said during a morning news conference at GM's headquarters in Detroit.

UAW spokesman Paul Krell, who was attending a conference in Washington, said he had no immediate comment on the GM announcement.

York, whose tenure on the board was to begin Tuesday, is a consultant to Tracinda Corp., Kerkorian's private equity firm. Tracinda owns 9.9 percent of GM's common stock and is GM's third-largest shareholder.

General Motors is the third of the Big Three U.S. automakers to announce draconian measures this year.

Last month, Ford said that it plans to close 14 plants over the next six years and eliminate as many as 30,000 jobs, half through attrition and half through layoffs.

On the same day, DaimlerChrysler AG said that it would reduce administrative staff by 20 percent over three years, cutting 6,000 jobs in such areas as accounting, auditing, personnel and strategic planning and saving some $1.2 billion a year.

A few days later, President Bush offered no encouragement to any U.S. automobile companies that might be thinking about turning to the federal government for a financial bailout.

"I think it's very important for the market to function," he said in an interview in The Wall Street Journal, which said Mr. Bush suggested that he was optimistic about the companies' prospects.

He said companies need to manufacture "a product that's relevant" and that his administration has discussed new fuel technologies with the nation's top two auto makers.