GM plans to freeze salaried workers’ pensions
DETROIT — General Motors Co. plans to freeze its U.S. pension plan for longtime white-collar workers and give all salaried employees annual bonuses but not pay raises in an effort to contain expenses, officials announced Wednesday.
The Detroit-based automaker said roughly 19,000 salaried workers hired before 2001 will move from a traditional pension with guaranteed payments to a 401(k)-type plan with contributions based on salary and bonuses. Employees hired after 2001, which represent about 30 percent of the company’s salaried workforce, already are in that defined contribution plan.
GM also said it would offer bonuses to all 26,000 salaried employees and release the amounts when it announces quarterly and full-year earnings Thursday. The company is expected to post a 2011 net profit of around $8 billion, the best in its 103-year history.
Citigroup pays $158M to settle mortgage fraud
NEW YORK — Citigroup has agreed to pay $158.3 million to settle claims that its mortgage unit duped the U.S. government into insuring risky mortgage loans for more than six years.
The government said Wednesday that Citi Mortgage certified 30,000 mortgages for insurance provided by the Federal Housing Agency and submitted many certifications that were “knowingly or recklessly false.”
More than a third of those mortgage loans went into default, resulting in millions of dollars in losses for the government because of the insurance claims.
Wednesday’s payments are in addition to the $1.8 billion Citigroup has to pay in connection with the $25 billion mortgage loan settlement announced last week by the Justice Department and the nation’s top mortgage lenders.
Cisco challenges merger between Microsoft, Skype
BRUSSELS — Networking company Cisco said Wednesday that it is challenging Microsoft’s $8.5 billion takeover of Skype at the European Union’s top court to ensure Microsoft won’t block other video conferencing services.
The European Commission, the EU’s competition regulator, cleared the takeover in October and the merger was completed later that month. Microsoft Corp. hopes that owning Skype will allow it to better compete across platforms with other tech giants including Apple Inc. or Google Inc.