GM says its pension plans will be funded by year's end

DETROIT (AP) — General Motors Corp. says its once-lagging U.S. employee pension plans will be nearly fully funded by year's end, reflecting the improved performance of financial markets and cash contributions.

To start 2003, GM's pension plans for hourly and salaried workers were underfunded by $19.3 billion — a big concern on Wall Street and a drag on the company's stock.

The world's largest automaker said Friday it has contributed more than $14 billion to the plans this year and could add another $4.1 billion by year's end if it completes the sale of its Hughes Electronics subsidiary.

GM has roughly 160,000 employees in the United States.

"The pension story has been a big issue for us, certainly over the last year," John Devine, GM's vice chairman and chief financial officer, said in a conference call with analysts.

"We're pleased to report today that the story is we've made good progress in funding our pension plans this year," Devine said.

GM's forecast is based on 2003 asset returns of 18 percent.

Based on contributions this year and normal asset returns, the automaker said it doesn't expect to be required to make additional cash contributions to the plans until at least 2010.