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GM changing pay, pensions

Salaried workers to receive bonuses instead of raises

– General Motors Co. plans to freeze its U.S. pension plan for longtime white-collar workers and give all salaried employees annual bonuses but not pay raises in an effort to hold down expenses, officials announced Wednesday.

The Detroit automaker said roughly 19,000 salaried workers hired before 2001 will move from a traditional pension with guaranteed payments to a 401(k)-type plan with contributions based on salary and bonuses.

Employees hired after 2001, about 30 percent of the company’s salaried workforce, already are in that defined contribution plan.

The changes take effect Oct. 1, and workers will keep all pension benefits they have already accrued, officials said.

GM also said it would offer bonuses to all 26,000 salaried employees and release the amounts when it announces quarterly and full-year earnings today.

The company, which has a truck plant in Allen County and a foundry in Defiance, Ohio, is expected to post a 2011 net profit of about $8 billion – the best in its 103-year history.

Cindy Brinkley, GM vice president of global human resources, said the changes are geared toward increasing profitability and reducing risk.

GM, a little less than three years past government-funded bankruptcy protection that saved the company from financial collapse, is expected to top its record annual profit of $6.7 billion of 1997, when the pickup truck and SUV sales boom was in full swing.

Earnings should set a record despite total sales in the U.S., GM’s second-largest market, near a historic low of 12.8 million cars and trucks last year.

The changes that were announced Wednesday include offering salaried employees an additional five days of vacation and eliminating a plan that allows them to buy up to five days.

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