GM shares lose 4% after Kerkorian sale

Shares of General Motors Corp. extended their decline on Wednesday, losing another 4 percent, after news that billionaire Kirk Kerkorian's investment company sold 12 million shares. GM's stock, already down 50 percent this year, fell to its lowest in more than 20 years after Kerkorian's Tracinda Corp. reduced its stake in GM to 7.8 percent from 9.9 percent.

The world's largest automaker has lost nearly $4 billion this year amid high health-care and materials costs, shrinking U.S. market share and sinking sales of large SUVs - its long-time profit generators. GM plans to launch a broader restructuring effort that will include the slashing of 30,000 jobs and closing of 12 facilities in North America.

The automaker has said it plans to sell its finance arm - General Motors Acceptance Corp. - to restore an investment-grade rating to the unit. Adding to the pressure is a possible strike at bankrupt Delphi Corp., GM's main auto parts supplier. Delphi has said it will ask the court to negate its labor contracts if it cannot reach a deal with its union.

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(2005-12-22 22:55:17 SGT) [Biz] Permalink

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