AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGift Box shows no rust in San Antonio Stakes win at Santa Anita GM CFO Frederick “Fritz” Henderson, who attended York’s speech on the third day of press previews for the North American International Auto Show, told reporters afterward that any dividend cut would be for the board to decide. He said the company has determined that it is not appropriate to set some of the targets that York discussed. While Henderson noted that he feels like he already is in “crisis mode,” he said it was interesting to hear York’s ideas. “Frankly, there’s a lot that he had to say that I agree with,” Henderson said. Under the proposals outlined by York, GM would cut its $2-per-share annual dividend by 50 percent. York said Tracinda would support such a cut and that the decision would save GM $566 million a year. York also said Kerkorian is interested in reacquiring the 12 million GM shares that he sold for tax purposes in December and is willing under the right circumstances – including additional cooperation between GM and the United Auto Workers union – to acquire an additional 12 million shares. “We are optimistic that a path exists for GM to return to prosperity,” York said in the speech. He delivered it in a hotel ballroom at the Renaissance Center, which houses GM’s world headquarters and is down the street from the convention center where GM and other automakers showed off their latest models. A United Auto Workers spokesman said the union didn’t have any comment on York’s proposals. York made comparisons to the cost-cutting and turnaround efforts made while he was with the former Chrysler Corp. and IBM Corp., as well as the way that Nissan Motor Co. CEO Carlos Ghosn laid out recovery goals in 1999. York suggested salary cuts for GM board members, top executives and other white- and blue-collar employees, with those at the top taking the biggest percentage cuts. And he said GM needs to focus on its core brands, consider unloading Saab and possibly its Hummer unit and stop selling Isuzus. Kerkorian was amassing GM shares last year and had a nearly 10 percent stake in the automaker, but in December he reduced his share to about 7.8 percent. During the speech and in an interview with The Associated Press afterward, he explained Kerkorian’s decision to invest in GM. “Every now and then a large-cap stock really gets hammered, and when you see that situation in general it represents a tremendous potential opportunity if you’re a long-term investor,” York said. In December, after Kerkorian’s sale, GM shares fell below $19 a share to their lowest level since 1982. On Tuesday, GM shares were down 35 cents, or 1.6 percent, to close at $22.06 on the New York Stock Exchange. York is a former Chrysler and IBM chief financial officer. Kerkorian and York worked closely together on a failed takeover bid of Chrysler in 1995. Kerkorian’s private equity firm, Tracinda Corp. is based in Beverly Hills and is the majority owner of casino and hotel operator MGM Mirage Inc. In December, General Motors Corp. and Tracinda said they failed to reach an agreement on Kerkorian’s request to gain a seat on the automaker’s board for York. GM and Tracinda said they expected to continue discussing the matter, though York said after his speech Tuesday that no talks have taken place this year. Some investors had hoped York would join the board in order to speed restructuring efforts at GM, which lost nearly $4 billion in the first nine months of last year. In November, the company announced a plan to cut 30,000 jobs and close 12 facilities by 2008, a plan York called a significant first step. Kerkorian, the former owner of the MGM movie studio, has a history of wrestling with automakers to increase the value of his investment. He sued DaimlerChrysler AG after the merger of Chrysler Corp. and Daimler-Benz AG, saying the deal cost him millions because it wasn’t a true merger of equals. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! DETROIT – An aide to billionaire investor Kirk Kerkorian on Tuesday laid out a plan to further streamline General Motors Corp. and return the world’s largest automaker to profitability with cuts that would hit investors, top executives and others all the way down to the factory floors. Jerome York proposed cutting in half GM’s annual dividend while calling for GM to set profitability goals and lay out a general timetable for achieving them. He said the moves would instill a sense of urgency in GM’s turnaround efforts. York also said Kerkorian, one of GM’s largest shareholders, is interested in buying more GM shares, and expressed optimism about its recovery prospects. But he said the time has come for “crisis mode” at GM. “I believe the shareholders will support reducing the dividend as part of an equality-of-sacrifice plan that can increase the value of their shares over time,” York, an adviser to Kerkorian’s private equity firm, Tracinda Corp., said in a speech to the Society of Automotive Analysts.
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