GM Spending Cuts to Add $15 Billion to Cash by 2009 (Update3)

By Greg Bensinger and Jeff Green

July 15 (Bloomberg) -- General Motors Corp., buffeted by a U.S. sales collapse and three years of losses, suspended its stock dividend, cut salaried worker costs by 20 percent and proposed selling assets to raise at least $15 billion in the next 18 months.

GM said the reductions in salaried jobs and eliminating the 25-cent quarterly dividend will help shrink annual operating expenses by $10 billion. The company also plans to raise $4 billion to $7 billion through asset sales and new bank loans.

``At first blush, these would be positive steps for liquidity, but we would view them as absolute necessities given the current market conditions,'' said Gregg Lemos Stein, a credit analyst at Standard & Poor's in New York.

The moves may help Chief Executive Officer Rick Wagoner, 55, counter claims that the weakest U.S. auto demand in more than a decade puts GM at risk of bankruptcy. Merrill Lynch & Co. said July 2 that GM may need to raise $15 billion and a Chapter 11 filing is ``not impossible'' should sales continue to deteriorate. GM last eliminated its dividend in 1922.

The increased cash means the automaker will have enough to operate should the U.S. market fall to 14 million cars and trucks this year and next, lower than analysts expect, Wagoner said today in a broadcast to employees. GM also figures on oil costing $130 to $150 a barrel, compared with $146 currently.

``Overall, we believe that the cost cutting is ahead of market expectations -- and relatively credible, while the fundraising provides less up front cash than we and the market had been looking for,'' Lehman Brothers Analyst Brian Johnson wrote in a report today.

GM fell 35 cents, or 3.7 percent, to $9.03 at 10:38 a.m. in New York Stock Exchange composite trading.

BY-Bloomberg.com

Obama vows to end US role in Iraq

Barack Obama, the Democratic contender for the US presidency, has said his main priority as US president will be to end the US involvement in Iraq.

In a foreign policy speech, Senator Obama said "our single-minded and open-ended focus on Iraq is not a sound strategy for keeping America safe".

His second priority would be to take the war to al-Qaeda and the Taleban in Afghanistan and Pakistan.

He criticised the policies of his Republican rival in November's poll.

John McCain says events on the ground must govern any Iraq pullout.

Earlier, President George W Bush rejected any "artificial" timetable for withdrawing US troops, saying a decision must be made "as conditions permit".

Mr Obama's speech comes ahead of a tour that will include Iraq and Afghanistan.

The dates of the trip have not been disclosed for security reasons.

BY-BBC NEWS

Bombers kill Iraq army recruits

At least 35 people have been killed and more than 50 injured in a double suicide bombing north of the Iraqi capital, Baghdad, army sources say.

The two attackers mingled with a crowd of would-be recruits at an army base in the city of Baquba and then blew themselves up simultaneously, they say.

At least one of the bombers is said to have been disguised as a soldier.

Meanwhile, US forces in Iraq say they have detained 15 suspected insurgents, including an alleged al-Qaeda leader.

The bomb attacks at the al-Saad army camp in the east of Baquba took place at about 0800 (0500 GMT).

China rejects BBC Darfur claims

China says a BBC documentary accusing Beijing of fuelling the war in Darfur by supplying military equipment and training to Sudan is "strongly biased".

On Monday, the BBC's Panorama programme revealed evidence that China had sent military trucks to Sudan, which were used in attacks on civilians in Darfur.

It also said China was training fighter pilots who fly Chinese A5 jets there.

But China's special envoy for Darfur, Liu Guijin, says his country has never violated a UN ban on arms to Darfur.

The UN embargo requires foreign nations to take measures to ensure they do not militarily assist anyone in the conflict in Darfur, in which the UN estimates about 300,000 people have died.

More than two million people are also believed to have fled their villages in Darfur, destroyed by pro-government Arab Janjaweed militia.

BY-BBC NEWS

GM to cut jobs, suspend dividend

Beleaguered automaker also plans asset sales, aiming for $10 billion in 'cash improvements' by 2009. CEO Wagoner says 'difficult decisions' necessary for survival.

By Aaron Smith, CNNMoney.com staff writer

Last Updated: July 15, 2008: 10:30 AM EDT

NEW YORK (CNNMoney.com) -- General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets and cut 20% worth of salaried cash costs in an overall plan to save billions of dollars.

"We need to take some very tough actions to ensure our survival and success," said Chief Executive Rick Wagoner, in a press conference, referring to the current market conditions as an "unprecedentedly difficult time."

GM (GM, Fortune 500) stock dropped about 5% on the news.

In an earlier broadcast to employees, Wagoner said that these were "difficult decisions," but necessary for the company to prevail in the weak economy beset by high oil prices, which he called GM's "greatest concern."

Wagoner said the cost-cutting actions should help GM generate $10 billion in "cash improvements" by the end of 2009. Overall, the company plans to beef up liquidity by $15 billion through 2009.

At the end of the first quarter, GM said it had $23.9 billion in liquidity and access to $7 billion worth of U.S. credit, which is enough funding to get through 2008. But the company said it is gathering more liquidity to protect itself from a "prolonged U.S. downturn."

"Our plan is not just a plan to survive; it's a plan to win," said Wagoner, noting that raised cash could aid the company in shifting from trucks and SUVs to more fuel efficient cars.

"Our stated goal is to become the fuel economy leader in every sector in which we participate," said Robert Lutz, GM's vice chairman of global product development.

Earthquake hits near Greek islands

(CNN) -- A strong earthquake struck Tuesday near Greek islands close to the Turkish coast, according to the U.S. Geological Survey.

One person died, police said.

The 6.4-magnitude quake hit about 40 miles (64 km) southwest of the Dodecanese Islands, a series of Greek islands in the Mediterranean Sea closer to the Turkish coast than to the Greek mainland, the survey said.

The quake happened at 6:26 a.m. local time (11:26 p.m. ET).

A 56-year-old woman died after slipping and hitting her head while racing downstairs to get out of her house, according to a police spokesman in Rhodes, a city in the Dodecanese Islands.

Authorities were concerned that another stronger earthquake would occur, Rhodes Mayor Hatzis N. Hatziefthimiou told CNN.

Video of Guantánamo Interrogation Released

By IAN AUSTEN

Published: July 16, 2008

OTTAWA — Video recordings released Tuesday showing interrogations of the only Canadian held at the Guantánamo Bay detention center in Cuba provided an unprecedented glimpse inside the compound.

Canadian Press, via Associated Press

Omar Khadr, a Canadian, in a photo from before he was imprisoned in 2002 at the age of 15.

The mood of the detainee, Omar Khadr, just 16 years old at the time of the interrogations, in February 2003, swings between calm and indifference to rage and grief in the recordings, which were released by his lawyers.

The video footage, which provides the most extensive videotaped images yet seen from inside Guantánamo Bay, shows Mr. Khadr pleading with a Canadian intelligence agent for help and, at one point, shows him displaying chest and back wounds that had still not healed months after his capture in Afghanistan.

The poor quality recordings were made by the United States military, and were given to Mr. Khadr’s Canadian lawyers by the Canadian Security and Intelligence Service under the terms of a court order.

They show Mr. Khadr, who is accused of killing a United States soldier in Afghanistan during a battle in July 2002, being questioned by an unidentified member of the Canadian intelligence agency.

In all, about seven hours of recordings were given to Mr. Khadr’s lawyers, but the lawyers released a selection of only about 10 minutes of video recording on Tuesday.

Mr. Khadr maintains that he was abused by American interrogators both at Guantánamo Bay and in Afghanistan. It appears from the recordings, as well as from written documents of the interrogations that were released last week, that Mr. Khadr initially believed that the Canadian agent had come to help him.

But Mr. Khadr eventually seems to realize that the agent is only there to extract information.

BY-The New York Times

Rights group fears Sudanese backlash

(CNN) -- Human rights activists said Tuesday they feared a move by the chief prosecutor of the International Criminal Court to file genocide charges against Sudan's president could provoke a violent backlash.

A Rwandan soldier serving with the U.N.-African Union peacekeeping force in Darfur guards a U.N. helicopter.

The 10 charges -- three counts of genocide, five of crimes against humanity and two of war crimes -- filed against President Omar Hassan al-Bashir include masterminding attempts to wipe out African tribes in Darfur with a campaign of murder, rape and deportation.

The indictment marks the first time prosecutors at the world's first permanent war crimes tribunal have issued charges against a sitting head of state, but al-Bashir is unlikely to face trial in the immediate future.

Chief prosecutor Luis Moreno-Ocampo urged judges to issue an arrest warrant for al-Bashir to prevent the deaths of 2.5 million refugees who remain under attack from government-backed Janjaweed militia.

About 300,000 people have already died in Darfur, the United Nations estimates.

But Sudan's anger over the charges could scupper talks to resolve the decades-old rivalry between north and south Sudan as well as efforts by an understaffed joint U.N.-African Union peacekeeping force (UNAMID) to protect refugees, a rights group said Tuesday.

"The prosecutor's legal strategy ... poses major risks for the fragile peace and security environment in Sudan, with a real chance of greatly increasing the suffering of very large numbers of its people," the Brussels-based International Crisis Group said.

"These are significant risks, particularly given that the likelihood of actually executing any warrant issued against al-Bashir is remote, at least in the short term," it added.