GM stock falls as union votes on health care | VailDaily.com
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GM stock falls as union votes on health care

DETROIT – General Motors Corp. auto workers were wrapping up voting Thursday on an agreement endorsed by labor leaders that would require them to pay more for their health care. As workers voted, the automaker’s stock took a tumble on news that it will restate its earnings from 2001 because of an accounting error.GM shares fell $1.35, or 5.5 percent, to $23.28 in afternoon trading on the New York Stock Exchange, their lowest level in more than a decade. The shares had been trading in a 52-week range of $24.62 to $40.82.In a document filed Wednesday with the U.S. Securities and Exchange Commission, GM said the accounting error caused its 2001 earnings to be overstated by $300 million to $400 million, or up to 35 percent of its reported earnings. GM said an internal investigation revealed the error.Standard & Poor’s Ratings Services said Thursday the announcement wouldn’t immediately affect its rating of GM, which is already below investment grade.S&P said the revisions are errors in the timing of when to book credits from suppliers as well as a failure to recognize a decline in the value of GM’s investment in Fuji Heavy Industries Ltd.S&P said it will continue to evaluate ongoing SEC investigations of GM’s accounting practices “but the primary focus of our evaluation is expected to be on the well-publicized business challenges facing GM.”Those challenges include high labor costs, and GM is hoping to get some relief on that front with the ratification of the health care agreement by members of the United Auto Workers. Voting on the tentative agreement between the UAW and GM began last week and was to continue into Thursday evening, but several local unions said they had already passed the agreement.—On the Net:General Motors Corp.: http://www.gm.comUnited Auto Workers: http://www.uaw.org


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