GM shares tumble after SEC subpoenas documents on Delphi, other probes
Monday, October 24th 2005, 10:42 am
By: News On 6
DETROIT (AP) -- General Motors Corp. shares fell almost 5 percent in early trading Thursday, the day after the company said it received a Securities and Exchange Commission subpoena for documents about its dealings with parts maker Delphi Corp. and other matters.
GM, the world's largest automaker, announced the SEC actions in a public filing Wednesday.
GM shares fell $1.43, or 4.9 percent, to $27.74 in morning trading on the New York Stock Exchange. The stock has traded between $24.67 and $40.82 over the past year.
In its filing, GM said it was cooperating with the SEC "in connection with investigations reported by the media concerning pension and other post-employment benefits ... and certain transactions between General Motors and Delphi."
GM said in the filing that it would have no further comment.
General Motors employs about 2,600 at its plant in Oklahoma City, making it third-largest manufacturer in the state.
DaimlerChrysler AG revealed in an SEC filing this week that the SEC has subpoenaed information about the way the company calculates pension benefits for North American employees.
DaimlerChrysler said the request was connected to an investigation of accounting issues at GM that began in October 2004, and that Ford Motor Co. also has been subpoenaed.
GM said the SEC subpoenas covered "various matters involving GM that it has under investigation (including) GM's recovery of recall costs from suppliers and supplier price reductions or credits." The SEC is probing "any obligation GM may have to fund pension and (post-employment benefit) costs in connection with Delphi's proceedings under Chapter 11" bankruptcy protection, GM said.
Troy-based Delphi, the largest U.S. auto supplier and a former GM subsidiary, filed for bankruptcy protection Oct. 8.
GM said it also has received SEC and federal grand jury subpoenas involving its General Motors Acceptance Corp. financing arm as part of "industry wide investigations into practices in the insurance industry relating to loss mitigation insurance."
GM said it was cooperating with all of the investigations.