When considering the profit they make on stocks, many investors assess the gains they have obtained based on the appreciation of the stock on the open market or the gains they obtained after selling the stock for more than the original purchase price. However, it’s also wise to include the income acquired from stock dividends, if any.
Dividends are taxable payments to shareholders from a company’s earnings. These payments generally come from retail profits and tend to be distributed in the form of cash or stock. They are usually paid quarterly, and the amount is determined by the company’s board of directors.
Dividends are most often quoted by the dollar amount each share receives, put simply, the dividends per share. They can also be stated in terms of a percent of the current market price, designated as a dividend yield. The dividend yield is the annual dividend income per share divided by the current stock price.
Many mature, profitable companies offer regular dividends to shareholders. However, if a company experiences losses during the year or needs any earnings to be reinvested back into the business, it’s always possible that it could decide to suspend dividends. It’s important to remember that a company can decide to increase, decrease, or stop paying dividends at any time.
Rather than pay dividends to shareholders, many companies with current high growth rates choose to reinvest their earnings back into their businesses. On the other hand, some stable companies that haven’t experienced much growth might pay dividends to provide an incentive for investors to purchase their stock.
Before 2003, dividends were taxed at ordinary income tax rates reaching as high as 35%. But as a result of changes to the tax law, corporate dividends are currently taxed at a maximum rate of 15%; this lower rate will expire at the end of 2010 unless Congress acts to extend it. Because payouts have become more attractive to shareholders, many companies with high growth rates are offering dividends.
When investing in the stock market, it’s important to remember that the return and principal value of stocks fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost.
Wednesday, August 5, 2009
Tuesday, August 4, 2009
What Are the Tax Benefits of Charitable Trusts?
Americans give freely to support the causes they value, from churches, education, and the arts to medical research. Fortunately, current tax laws encourage and even reward philanthropy. Beyond the basic tax deductions for charitable giving, setting up one or both of the following types of trusts could provide financial advantages in addition to the personal satisfaction that comes from giving.
Charitable Remainder Trust
When money, securities, property, or other assets are placed in a properly structured charitable remainder trust, the donor or a beneficiary receives income for a specific term or for life. When the trust expires, the designated charity receives the assets that remain.
For the donor, there are several potential tax benefits: (1) Assets placed in the trust may be partially deductible for income tax purposes. (2) At death, trust assets are not subject to estate taxes because they are no longer part of the donor’s taxable estate. (3) Any appreciated assets in the trust are also exempt from current capital gains tax.
Charitable Lead Trust
A charitable lead trust is an estate conservation tool that uses the donor’s assets to provide income for a charity during the donor’s lifetime and then transfers the remaining assets to the donor’s heirs when he or she dies. This type of trust could potentially reduce the estate tax due upon death, most notably on highly appreciated assets, because they are not subject to current capital gains tax.
Keep in mind that donations to both types of charitable trusts are irrevocable. This means that the assets cannot be withdrawn once the trust is formed. Also bear in mind that not all charitable organizations are able to use all possible gifts. It is prudent to check first. The type of organization selected can also affect the tax benefits that may be received.
When structured properly, these tools could possibly be used to benefit the charities of your choice and also help to reduce your tax obligations at the same time.
The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional and your legal and tax advisors before implementing such strategies.
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.
We are on Twitter, FaceBook & MySpace,
PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to
Charitable Remainder Trust
When money, securities, property, or other assets are placed in a properly structured charitable remainder trust, the donor or a beneficiary receives income for a specific term or for life. When the trust expires, the designated charity receives the assets that remain.
For the donor, there are several potential tax benefits: (1) Assets placed in the trust may be partially deductible for income tax purposes. (2) At death, trust assets are not subject to estate taxes because they are no longer part of the donor’s taxable estate. (3) Any appreciated assets in the trust are also exempt from current capital gains tax.
Charitable Lead Trust
A charitable lead trust is an estate conservation tool that uses the donor’s assets to provide income for a charity during the donor’s lifetime and then transfers the remaining assets to the donor’s heirs when he or she dies. This type of trust could potentially reduce the estate tax due upon death, most notably on highly appreciated assets, because they are not subject to current capital gains tax.
Keep in mind that donations to both types of charitable trusts are irrevocable. This means that the assets cannot be withdrawn once the trust is formed. Also bear in mind that not all charitable organizations are able to use all possible gifts. It is prudent to check first. The type of organization selected can also affect the tax benefits that may be received.
When structured properly, these tools could possibly be used to benefit the charities of your choice and also help to reduce your tax obligations at the same time.
The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional and your legal and tax advisors before implementing such strategies.
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.
We are on Twitter, FaceBook & MySpace,
please check it out...
Registered Representative and securities offered through ING Financial Partners Member SIPC
14726 Ramona Ave. # 410, Chino, CA 91710
Jyot Insurance & Financial Services, Inc. is not a subsidiary of nor controlled by ING Financial Partners, IncPLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to
What Is the Estate Tax?
The estate tax is a tax on property that transfers to others upon your death. Estate taxes are due on the total value of your estate — your home, stocks, bonds, life insurance, and other assets of value. Everything you own, whatever the form of ownership, regardless of whether the assets have been through probate, is subject to estate taxes.
Also referred to as the “death tax,” the estate tax was first enacted in this country with the Stamp Act of 1797 to help pay for naval rearmament. After several repeals and reinstatements, the Revenue Act of 1917 put the current estate tax into place. Despite its long history, this tax remains controversial.
By working in much the same way as marginal income tax brackets, estate taxes claim a graduated percentage of the total value of your estate. For estates of greater value, the percentage amount due in taxes is generally higher.
The IRS calculates the estate tax due on your gross taxable estate by adding the value of your assets and then subtracting any applicable exemptions.
The most common exception to the federal estate tax is the unlimited marital deduction. The government exempts all transfers of wealth between a husband and wife from federal estate and gift taxes, regardless of the size of the estate. Of course, the surviving spouse must be a U.S. citizen to qualify for this exemption. When the surviving spouse dies, the estate will be subject to estate taxes and, unless the appropriate preparations have been made, only the surviving spouse’s applicable credit can be used. Other exemptions include mortgage and other debt, administration expenses of the estate, and losses during estate administration.
The Economic Growth and Tax Relief Reconciliation Act of 2001 made sweeping changes to the federal estate tax. It established a schedule that loweredthe top estate tax rate and raised the applicable credit amount gradually over several years. In 2010, the federal estate tax is scheduled to be repealed. However, because of the tax law’s sunset provision, the federal estate tax will return in 2011 at its previous maximum level unless Congress votes to permanently repeal the tax. (See the table for applicable credit amounts and top estate tax rates.)
Check with your tax advisor to be sure that your estate is protected as much as possible from estate taxes upon your death.
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.
Also referred to as the “death tax,” the estate tax was first enacted in this country with the Stamp Act of 1797 to help pay for naval rearmament. After several repeals and reinstatements, the Revenue Act of 1917 put the current estate tax into place. Despite its long history, this tax remains controversial.
By working in much the same way as marginal income tax brackets, estate taxes claim a graduated percentage of the total value of your estate. For estates of greater value, the percentage amount due in taxes is generally higher.
The IRS calculates the estate tax due on your gross taxable estate by adding the value of your assets and then subtracting any applicable exemptions.
The most common exception to the federal estate tax is the unlimited marital deduction. The government exempts all transfers of wealth between a husband and wife from federal estate and gift taxes, regardless of the size of the estate. Of course, the surviving spouse must be a U.S. citizen to qualify for this exemption. When the surviving spouse dies, the estate will be subject to estate taxes and, unless the appropriate preparations have been made, only the surviving spouse’s applicable credit can be used. Other exemptions include mortgage and other debt, administration expenses of the estate, and losses during estate administration.
The Economic Growth and Tax Relief Reconciliation Act of 2001 made sweeping changes to the federal estate tax. It established a schedule that loweredthe top estate tax rate and raised the applicable credit amount gradually over several years. In 2010, the federal estate tax is scheduled to be repealed. However, because of the tax law’s sunset provision, the federal estate tax will return in 2011 at its previous maximum level unless Congress votes to permanently repeal the tax. (See the table for applicable credit amounts and top estate tax rates.)
Check with your tax advisor to be sure that your estate is protected as much as possible from estate taxes upon your death.
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.
Monday, August 3, 2009
Psychologists repudiate gay-to-straight therapy
NEW YORK — The American Psychological Association declared Wednesday that mental health professionals should not tell gay clients they can become straight through therapy or other treatments.
In a resolution adopted by the APA's governing council, and in an accompanying report, the association issued its most comprehensive repudiation of "reparative therapy" — a concept espoused by a small but persistent group of therapists, often allied with religious conservatives, who maintain gays can change.
No solid evidence exists that such change is likely, says the resolution, adopted by a 125-4 vote. The APA said some research suggests that efforts to produce change could be harmful, inducing depression and suicidal tendencies.
Instead of seeking such change, the APA urged therapists to consider multiple options — that could range from celibacy to switching churches — for helping clients live spiritually rewarding lives in instances where their sexual orientation and religious faith conflict.
The APA had criticized reparative therapy in the past, but a six-member task force added weight to this position by examining 83 studies on sexual orientation change conducted since 1960. Its report was endorsed by the APA's governing council in Toronto, where the 150,000-member association's annual meeting is being held this weekend.
The report breaks new ground in its detailed and nuanced assessment of how therapists should deal with gay clients struggling to remain loyal to a religious faith that disapproves of homosexuality.
Judith Glassgold, a Highland Park, N.J., psychologist who chaired the task force, said she hoped the document could help calm the polarized debate between religious conservatives who believe in the possibility of changing sexual orientation and the many mental health professionals who reject that option.
"Both sides have to educate themselves better," Glassgold said in an interview. "The religious psychotherapists have to open up their eyes to the potential positive aspects of being gay or lesbian. Secular therapists have to recognize that some people will choose their faith over their sexuality."
In dealing with gay clients from conservative faiths, says the report, therapists should be "very cautious" about suggesting treatments aimed at altering their same-sex attractions.
"Practitioners can assist clients through therapies that do not attempt to change sexual orientation, but rather involve acceptance, support and identity exploration and development without imposing a specific identity outcome," the report says.
"We have to challenge people to be creative," said Glassgold.
She suggested that devout clients could focus on overarching aspects of religion such as hope and forgiveness to transcend negative beliefs about homosexuality, and either remain part of their original faith within its limits — for example, by embracing celibacy — or find a faith that welcomes gays.
"There's no evidence to say that change therapies work, but these vulnerable people are tempted to try them, and when they don't work, they feel doubly terrified," Glassgold said. "You should be honest with people and say, 'This is not likely to change your sexual orientation, but we can help explore what options you have.'"
One of the largest organizations promoting the possibility of changing sexual orientation is Exodus International, a network of ministries whose core message is "Freedom from homosexuality through the power of Jesus Christ."
Its president, Alan Chambers, describes himself as someone who "overcame unwanted same-sex attraction." He and other evangelicals met with APA representatives after the task force formed in 2007, and he expressed satisfaction with parts of the report that emerged.
"It's a positive step — simply respecting someone's faith is a huge leap in the right direction," Chambers said. "But I'd go further. Don't deny the possibility that someone's feelings might change."
An evangelical psychologist, Mark Yarhouse of Regent University, praised the APA report for urging a creative approach to gay clients' religious beliefs but — like Chambers — disagreed with its skepticism about changing sexual orientation.
Yarhouse and a colleague, Professor Stanton Jones of Wheaton College, will be releasing findings at the APA meeting Friday from their six-year study of people who went through Exodus programs. More than half of 61 subjects either converted to heterosexuality or "disidentified" with homosexuality while embracing chastity, their study said.
To Jones and Yarhouse, their findings prove change is possible for some people, and on average the attempt to change will not be harmful.
The APA task force took as a starting point the belief that homosexuality is a normal variant of human sexuality, not a disorder, and that it nonetheless remains stigmatized in ways that can have negative consequences.
The report said the subgroup of gays interested in changing their sexual orientation has evolved over the decades and now is comprised mostly of well-educated white men whose religion is an important part of their lives and who participate in conservative faiths that frown on homosexuality.
"Religious faith and psychology do not have to be seen as being opposed to each other," the report says, endorsing approaches "that integrate concepts from the psychology of religion and the modern psychology of sexual orientation."
Perry Halkitis, a New York University psychologist who chairs the APA committee dealing with gay and lesbian issues, praised the report for its balance.
"Anyone who makes decisions based on good science will be satisfied," he said. "As a clinician, you have to deal with the whole person, and for some people, faith is a very important aspect of who they are."
The report also addressed the issue of whether adolescents should be subjected to therapy aimed at altering their sexual orientation. Any such approach should "maximize self-determination" and be undertaken only with the youth's consent, the report said.
Wayne Besen, a gay-rights activist who has sought to discredit the so-called "ex-gay" movement, welcomed the APA findings.
"Ex-gay therapy is a profound travesty that has led to pointless tragedies, and we are pleased that the APA has addressed this psychological scourge," Besen said.
In a resolution adopted by the APA's governing council, and in an accompanying report, the association issued its most comprehensive repudiation of "reparative therapy" — a concept espoused by a small but persistent group of therapists, often allied with religious conservatives, who maintain gays can change.
No solid evidence exists that such change is likely, says the resolution, adopted by a 125-4 vote. The APA said some research suggests that efforts to produce change could be harmful, inducing depression and suicidal tendencies.
Instead of seeking such change, the APA urged therapists to consider multiple options — that could range from celibacy to switching churches — for helping clients live spiritually rewarding lives in instances where their sexual orientation and religious faith conflict.
The APA had criticized reparative therapy in the past, but a six-member task force added weight to this position by examining 83 studies on sexual orientation change conducted since 1960. Its report was endorsed by the APA's governing council in Toronto, where the 150,000-member association's annual meeting is being held this weekend.
The report breaks new ground in its detailed and nuanced assessment of how therapists should deal with gay clients struggling to remain loyal to a religious faith that disapproves of homosexuality.
Judith Glassgold, a Highland Park, N.J., psychologist who chaired the task force, said she hoped the document could help calm the polarized debate between religious conservatives who believe in the possibility of changing sexual orientation and the many mental health professionals who reject that option.
"Both sides have to educate themselves better," Glassgold said in an interview. "The religious psychotherapists have to open up their eyes to the potential positive aspects of being gay or lesbian. Secular therapists have to recognize that some people will choose their faith over their sexuality."
In dealing with gay clients from conservative faiths, says the report, therapists should be "very cautious" about suggesting treatments aimed at altering their same-sex attractions.
"Practitioners can assist clients through therapies that do not attempt to change sexual orientation, but rather involve acceptance, support and identity exploration and development without imposing a specific identity outcome," the report says.
"We have to challenge people to be creative," said Glassgold.
She suggested that devout clients could focus on overarching aspects of religion such as hope and forgiveness to transcend negative beliefs about homosexuality, and either remain part of their original faith within its limits — for example, by embracing celibacy — or find a faith that welcomes gays.
"There's no evidence to say that change therapies work, but these vulnerable people are tempted to try them, and when they don't work, they feel doubly terrified," Glassgold said. "You should be honest with people and say, 'This is not likely to change your sexual orientation, but we can help explore what options you have.'"
One of the largest organizations promoting the possibility of changing sexual orientation is Exodus International, a network of ministries whose core message is "Freedom from homosexuality through the power of Jesus Christ."
Its president, Alan Chambers, describes himself as someone who "overcame unwanted same-sex attraction." He and other evangelicals met with APA representatives after the task force formed in 2007, and he expressed satisfaction with parts of the report that emerged.
"It's a positive step — simply respecting someone's faith is a huge leap in the right direction," Chambers said. "But I'd go further. Don't deny the possibility that someone's feelings might change."
An evangelical psychologist, Mark Yarhouse of Regent University, praised the APA report for urging a creative approach to gay clients' religious beliefs but — like Chambers — disagreed with its skepticism about changing sexual orientation.
Yarhouse and a colleague, Professor Stanton Jones of Wheaton College, will be releasing findings at the APA meeting Friday from their six-year study of people who went through Exodus programs. More than half of 61 subjects either converted to heterosexuality or "disidentified" with homosexuality while embracing chastity, their study said.
To Jones and Yarhouse, their findings prove change is possible for some people, and on average the attempt to change will not be harmful.
The APA task force took as a starting point the belief that homosexuality is a normal variant of human sexuality, not a disorder, and that it nonetheless remains stigmatized in ways that can have negative consequences.
The report said the subgroup of gays interested in changing their sexual orientation has evolved over the decades and now is comprised mostly of well-educated white men whose religion is an important part of their lives and who participate in conservative faiths that frown on homosexuality.
"Religious faith and psychology do not have to be seen as being opposed to each other," the report says, endorsing approaches "that integrate concepts from the psychology of religion and the modern psychology of sexual orientation."
Perry Halkitis, a New York University psychologist who chairs the APA committee dealing with gay and lesbian issues, praised the report for its balance.
"Anyone who makes decisions based on good science will be satisfied," he said. "As a clinician, you have to deal with the whole person, and for some people, faith is a very important aspect of who they are."
The report also addressed the issue of whether adolescents should be subjected to therapy aimed at altering their sexual orientation. Any such approach should "maximize self-determination" and be undertaken only with the youth's consent, the report said.
Wayne Besen, a gay-rights activist who has sought to discredit the so-called "ex-gay" movement, welcomed the APA findings.
"Ex-gay therapy is a profound travesty that has led to pointless tragedies, and we are pleased that the APA has addressed this psychological scourge," Besen said.
Wall Street rises on recovery optimism, Ford sales
NEW YORK (Reuters) - U.S. stocks rose on Monday after data showed the manufacturing sector shrunk at a slower pace in July, while rising commodity prices boosted natural resource stocks.
The sharp advance briefly pushed the broader S&P 500 Index .SPX to its highest level in nine months, above the psychologically important 1,000 level.
Ford Motor Co's (F.N) July sales jumped 2 percent, adding to the positive tone.
According to the Institute for Supply Management, its index of national factory activity rose to 48.9 in July from 44.8 in June. A Reuters survey of economists had forecast 46.2.
"The ISM data adds to the building case that the economy has stabilized and that it is going to grow this quarter. I imagine it will embolden the case of the bulls," said Jim Awad, managing director at Zephyr Management in New York.
The Dow Jones industrial average .DJI rose 81.70 points, or 0.89 percent, to 9,253.31. The Standard & Poor's 500 Index .SPX gained 9.80 points, or 0.99 percent, to 997.28. The Nasdaq Composite Index .IXIC shot up 15.06 points, or 0.76 percent, to 1,993.56.
The S&P 500 is now up 47.4 percent since hitting a 12-year low on March 9.
Among natural resource stocks, shares of aluminum producer Alcoa Inc (AA.N) jumped 6 percent to $12.46, while miner Freeport-McMoran Inc (FCX.N) shot up 7.7 percent. The S&P materials index .GSPM.N was up 2.8 percent.
Ford shares rose 7.1 percent to $8.54. The company is among the primary beneficiaries of the federal government's "Cash for Clunkers" incentive program that took effect on July 24.
The Senate on Monday was due to vote on extending the program to stimulate auto sales after the U.S. House approved $2 billion for it on top of an initial $1 billion in June.
3M Co (MMM.N) shares rose 2 percent to $71.95 after Goldman Sachs upgraded the Dow component to "buy" from "neutral.
We are on Twitter, FaceBook & MySpace,
PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to
The sharp advance briefly pushed the broader S&P 500 Index .SPX to its highest level in nine months, above the psychologically important 1,000 level.
Ford Motor Co's (F.N) July sales jumped 2 percent, adding to the positive tone.
According to the Institute for Supply Management, its index of national factory activity rose to 48.9 in July from 44.8 in June. A Reuters survey of economists had forecast 46.2.
"The ISM data adds to the building case that the economy has stabilized and that it is going to grow this quarter. I imagine it will embolden the case of the bulls," said Jim Awad, managing director at Zephyr Management in New York.
The Dow Jones industrial average .DJI rose 81.70 points, or 0.89 percent, to 9,253.31. The Standard & Poor's 500 Index .SPX gained 9.80 points, or 0.99 percent, to 997.28. The Nasdaq Composite Index .IXIC shot up 15.06 points, or 0.76 percent, to 1,993.56.
The S&P 500 is now up 47.4 percent since hitting a 12-year low on March 9.
Among natural resource stocks, shares of aluminum producer Alcoa Inc (AA.N) jumped 6 percent to $12.46, while miner Freeport-McMoran Inc (FCX.N) shot up 7.7 percent. The S&P materials index .GSPM.N was up 2.8 percent.
Ford shares rose 7.1 percent to $8.54. The company is among the primary beneficiaries of the federal government's "Cash for Clunkers" incentive program that took effect on July 24.
The Senate on Monday was due to vote on extending the program to stimulate auto sales after the U.S. House approved $2 billion for it on top of an initial $1 billion in June.
3M Co (MMM.N) shares rose 2 percent to $71.95 after Goldman Sachs upgraded the Dow component to "buy" from "neutral.
We are on Twitter, FaceBook & MySpace,
please check it out...
Registered Representative and securities offered through ING Financial Partners Member SIPC
14726 Ramona Ave. # 410, Chino, CA 91710
Jyot Insurance & Financial Services, Inc. is not a subsidiary of nor controlled by ING Financial Partners, IncPLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to
Friday, July 31, 2009
Moody's cuts Energy Future Holdings, warns on debt
Moody's Investors Service on Monday cut its ratings on Energy Future Holdings to a deeply speculative grade and warned the company will likely need to restructure its $44 billion debt load.
Energy Future Holdings, formerly known as TXU Corp, is struggling with its debt after being taken private in the largest leveraged buyout in U.S. history in 2007 by private equity firms Kohlberg Kravis Roberts & Co KKR.UL and Texas Pacific Group TPG.UL.
"The capital structure is untenable and will likely prompt the company to pursue some form of restructuring activity," Moody's said in a statement.
"These actions are likely to address the company's liquidity profile and its substantial maturities upcoming in 2014," Moody's said.
Energy Future Holdings has around $23 billion of debt maturing in 2014, Moody's said.
Moody's cut Energy Future Holdings' corporate family rating one step to Caa1, seven steps below investment grade and a deeply speculative grade. The outlook is negative, indicating an additional cut may be likely in the coming 12-to-18 months.
A distressed debt exchange, in which bondholders swap debt for new cash, debt or equity at less than the debt's par value is deemed a default by rating agencies.
UPDATE 2-More than 6,000 GM hourly workers leave automaker
* 66,000 U.S. hourly workers leave GM since 2006
* GM aims to reduce hourly workforce further in 2009
* GM also cutting white-collar workers, executives (Adds bullet points, details on GM plans to reduce jobs)
DETROIT, Aug 3 (Reuters) - More than 6,000 U.S. hourly workers have left General Motors Co [GM.UL] under the automaker's latest buyout program intended to make it a leaner company after its emergence from bankruptcy.
GM, which exited bankruptcy on July 10 by selling most of its assets to a group funded by the U.S. Treasury, said the latest round of buyouts has brought the total number of its U.S. factory workers to 48,000.
GM has said it aims to reduce its U.S. hourly employment to about 40,500 by the end of 2009, through layoffs and other measures.
The cuts add to the thousands lost in the downturn for U.S. automakers that began in 2005 and forced both GM and Chrysler Group LLC to restructure under Chapter 11 bankruptcy protection.
Since 2006, about 66,000 U.S. hourly workers -- more than half of its factory workforce -- have left GM through buyouts and retirement packages as the automaker scrambled to reduce costs in the face of slowing sales and mounting losses.
The company also plans to cut its white-collar workforce more than 20 percent, or 6,000 jobs, this year. Executive ranks will be cut 35 percent.
GM lost $31 billion in 2008, taking its total losses to $82 billion in the last four years. It lost its ranking as the top global automaker by vehicle sales worldwide in 2008 when it was outsold by Toyota Motor Corp (7203.T).
"One of the very tough, but necessary actions to position the company for long-term viability and success is to reduce our total U.S. workforce, both hourly and salaried employees," said Diana Tremblay, GM vice president of labor relations.
Most of the hourly workers left the company on Aug. 1, GM said.
GM is also scheduled to report its U.S. auto sales for July later on Monday. Analysts expect the automaker to post a double-digit decrease in sales from a year ago, although the U.S. government's trade-in incentives likely limited the pace of the decline.
We are on Twitter, FaceBook & MySpace,
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Registered Representative and securities offered through ING Financial Partners Member SIPC
14726 Ramona Ave. # 410, Chino, CA 91710
Jyot Insurance & Financial Services, Inc. is not a subsidiary of nor controlled by ING Financial Partners, IncPLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to
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