GM on the rocks- suspends dividend

NEW YORK (CNNMoney.com) -- General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets, and cut 20% worth of salaried cash costs.

Chief Executive Rick Wagoner, in a broadcast to employees, said that these were "difficult decisions," but necessary for the company to prevail in the weak economy beset by high oil prices, which he called GM's "greatest concern."

"Our plan is not just a plan to survive; it's a plan to win," said Wagoner, noting that raised cash could aid the company in shifting from trucks and SUVs to more fuel efficient cars.

GM (GM, Fortune 500) has lost about one third of its 107,000 U.S. hourly workers since 2004. GM offered buyouts to its entire remaining U.S. hourly workforce of 74,000 in February, in a bid to unload its more experienced, higher-paid employees.

The Detroit-based automaker has been hard-hit by record-high gas prices, economic weakness, and a waning consumer interest in trucks and sport utility vehicles. The company has not made a profit since 2005.

Truck sales were down 21% in the first six months of 2008, while car sales were down 9% and Hummer sales plunged 40%. Overall, GM's vehicle sales were down 16%: worse than the industrywide vehicle sales decline of 10%.

In June, GM said it would shut four SUV and truck plants, would shift to more fuel efficient vehicles and discontinue its Hummer brand.

The stock price for GM (GM, Fortune 500), the world's largest automaker, has plunged 62% this year, to 50-year lows.

Despite the doom and gloom in America, GM's sales edged up in Europe by 3% in the first six months of 2008, including a 58% increase in Eastern Europe and a 60% surge in Russia. This includes a 21% increase in Russian Hummer sales.

"Frankly, we're very well positioned outside the U.S. now, and will be in [the U.S.] too, when this cycle concludes," said Wagoner.

GM is the fourth-largest American company in terms of annual sales, competing with Toyota Motor (TM) and Ford Motor (F, Fortune 500