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Administration March 12, 2006
Struggling GM Drops K Plan Match
December 15, 2005 (PLANSPONSOR.com) - The rampant
money troubles at General Motors have come home to roost for
the giant automaker's K plan for salaried workers with a
decision to temporarily halt its matching
contribution.
Reported by Fred Schneyer
GM now contributes $0.20 for each $1 that workers invest up to 6%, Reuters reported. Last year, the company slashed its match from $0.50 to $0.20 cents.
The decision wasn’t permanent, the company was quick to point out. “We continue to monitor the business in determining when to reinstate the matching contributions,” GM spokesman Robert Herta told Reuters.
The world’s largest automaker was also dropping its current requirement that up to 3% of worker’s K plan contributions and 100% of the company match be invested in shares of the company stock. 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’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 plummeted 44% this year. GM, which has lost nearly $4 billion in 2005, is struggling with high health-care and commodity costs, loss of domestic market share to foreign rivals and slumping sales of its once-profitable sport utility vehicles.