Six GM Executives Sell Shares

DETROIT May 11, 2009; Tom Krisher writing for the AP reported that six General Motors Corp. executives recently sold more than 200,000 shares of the automaker as GM moves toward issuing new equity to give large stakes to the U.S. government and a United Auto Workers retiree health care trust fund.

Four group vice presidents and two vice chairmen sold nearly 205,000 shares Friday and Monday at prices ranging from $1.45 to $1.61 per share. GM shares closed Monday down 17 cents at $1.44.

Spokeswoman Julie Gibson says the sales don't show a lack of faith in the company. She says GM has disclosed publicly that shareholders run the risk of significant dilution or possibly losing their investments in a potential bankruptcy filing.

"They're not operating with any knowledge that other people don't have," she said. The executives had a short window of Friday through Tuesday to sell the shares, she added.

GM has offered bondholders 10 percent of the company's equity in exchange for wiping out $27 billion in debt. The company also is negotiating with the U.S. government for a potential 50 percent share of GM stock, and with the UAW to take 39 percent in exchange for half of the $20 billion that the company owes the trust fund.

The remaining 1 percent would go to those who hold the company's current 611 million outstanding shares.

If the bond exchange goes through, GM plans to issue 62 billion new shares and then do a 100-for-1 reverse stock split.

Executives selling stock include retiring Vice Chairman Bob Lutz, who disposed of 81,360 shares at $1.61 each for a total of $130,990. Vice Chairman Thomas Stephens and Group Vice Presidents Carl-Peter Forster, Ralph Szygenda, Gary Cowger and Troy Clarke sold smaller amounts.

GM has received $15.4 billion in government loans and faces a June 1 deadline to finish restructuring or head into Chapter 11 bankruptcy protection. The company has said it would prefer to restructure out of court, but Chief Executive Fritz Henderson said Monday that bankruptcy is more probable with so much to accomplish and the deadline little more than two weeks away.