Ditch that dividend

10 Jan 2006 By Antony Currie Follow @AntonyMCurrie

Kirk Kerkorian’s top aide shouldn t need to tell the ailing car company to cut its dividend. The board should have moved years ago. The delay suggests the board has not fully grasped the gravity of GM s longterm challenges. But the unions have also been asleep.

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Jerry York, advisor to billionaire Kirk Kerkorian, on Tuesday called for for General Motors to cut its annual dividend. At present the carmaker pays $0.50 a share each quarter, or $1.1bn a year. York laid out his thoughts in a speech to car analysts at the Detroit car show on Tuesday.

He also said that there should be a "substantial reduction" in payments to directors, and urged GM executives to take a pay cut.

Kerkorian's investment vehicle, Tracinda, owns 7.8% of General Motors shares. Last year the company was in discussions with GM to get a seat on the car company's board, which York was expected to fill. The talks were inconclusive, although GM's chief executive Rick Wagoner and chief financial officer Fritz Henderson both intimated at the Detroit car show that the talks could resume.

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