General Motors Wipes Out Half of Pension Liabilities


Taking another step to repair its financial health, General Motors (NYSE:GM) revealed on Tuesday it has eliminated half of its pension liabilities since 2009, leaving it on the hook for less than $9 billion more.

The accomplishment, which was set to be announced by CEO Dan Akerson at GMs shareholder meeting, leaves the Detroit auto makers plan 90% funded.

The pension fund was underfunded by $17.1 billion as of the end of 2009 and by $11 billion as of the end of last quarter.

GM, which like Chrysler received a controversial government bailout in 2009, has hit a number of key milestones in recent quarters.

The company returned to the public markets earlier this year with the largest U.S. IPO ever and tripled its first-quarter profits. However, the slowing economy and high gas prices may be taking their toll as GM reported a 1.2% year-over-year decline in May sales.

Shareholders had a muted response to pension news, bidding GMs stock up 0.11% to $28.59 Tuesday morning. GM has slumped 9% over the past month and lost 22.5% of its value so far this year.

Speaking to reporters ahead of the shareholder meeting, Akerson also addressed the U.S. governments stake in the auto maker.

"At some point they have to decide whether they are an investor or whether they were trying to save an industry, Akerson said.