GM to cut jobs, raise liquidity by $15 billion

DETROIT (Reuters) - General Motors Corp said on Tuesday it would cut white-collar employment costs by 20 percent, sell up to $4 billion of assets, and borrow at least $2 billion in a bid to bolster its liquidity by $15 billion through 2009.

GM GM.N also said it would suspend its common stock dividend in a restructuring driven by high fuel prices, a shift away from trucks and SUVs, and the lowest U.S. industrywide auto sales in a decade.

GM said it expects to generate $10 billion in cash savings from operations through 2009. It said it expects to capture those savings through steps that include cutting white-collar jobs and some retiree health-care coverage, eliminating executive bonuses for 2008, and reducing capital spending by $1.5 billion.

GM shares rose 2.8 percent to $9.65 in premarket trade after the restructuring news.

The largest U.S. automaker has been under intensifying pressure to cut costs and raise capital because of the deepening slump in U.S. auto sales.

In early June, GM Chief Executive Rick Wagoner announced the company would close four North American truck plants employing about 100,000 workers and try to sell its Hummer brand in response to higher gas prices.

But market sentiment has darkened on GM and the auto sector in the weeks since that announcement, with most analysts no longer expecting a real recovery in U.S. auto sales in 2009.