DETROIT, Jan. 10 (UPI) -- General Motors expects to earn more than $10 billion this year but pension costs and higher healthcare expenses will cost about $1.9 billion, company officials said.
Analysts Friday blamed the poor performance of the stock market for a $19.3 billion deficit in the automakers $67 billion private pension fund, the nation's largest corporate pension fund at the end of 2001.
The pension plan was under-funded by about $9.1 billion in 2001.
"We have a hole in the pension side no doubt due to poor performance in equity markets three years in a row," said GM Chief Executive Officer G. Richard Wagoner at the North American International Auto Show Thursday.
The pension fund lost 7 percent of its value in 2002 and GM cut projected pension investment returns by 1 percent to 9 percent, a move that will cost some $700 million in 2003 earnings.
GM put $4.8 billion in cash in the pension fund during 2002 and expects to contribute $3.5 billion to $4 billion this year.
GM said it expected to earn $5 a share in 2003 and despite the increased pension expense its earnings would still beat Wall Street forecasts. GM earned $6.75 a share in 2002.
General Motors Corp. shares were 19 cents higher at $39.69 early Friday afternoon after gaining $1.29 on Thursday.
On Wednesday, DaimlerChrysler announced its pension costs would increase $730 million in 2003.
Ford said its pension plan for U.S. workers was under-funded by $7.3 billion, $14.5 billion worldwide, after the fund had a negative return of 9.7 percent last year because of stock market losses. The world's second-largest automaker contributed $500 million cash to the fund Jan. 6 and said its pension costs would reach $270 million in 2003.
