General Motors Co., the largest U.S. automaker, said it expects to cut its pension obligation by $26 billion by offering lump-sum payments to about 42,000 retirees and shifting its plans to a unit of Prudential Financial Inc.
"These actions represent a major step toward our objective of de-risking our pension plans and will further strengthen our balance sheet and give us more financial flexibility," Dan Ammann, GM's chief financial officer, said today in a statement.
GM said the moves, which follow Ford Motor Co.'s announcement that it plans to offer lump-sum buyouts, will lead to special charges worth $2.5 billion to $3.5 billion in the second half. The Detroit-based company projects future pension income to be reduced by $200 million annually.
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