Oct. 23 (Bloomberg) -- General Motors Corp., saddled with $70 billion in losses since 2004 and declining sales, will eliminate more than the 5,000 salaried jobs already targeted and stop contributing to some retirement-savings plans.

Slower-than-predicted sales in U.S. and Europe are forcing deeper cuts, the largest U.S. automaker said in a letter to executives. Detroit-based GM will temporarily halt matching payments of as much as 4 percent to nonunion employees' 401(k) savings plans Nov. 1 and end programs to assist with tuition and adoptions in January, spokesman Tom Wilkinson said today.

``This just reflects the severe global slowdown in demand,'' Pete Hastings, a Morgan Keegan Inc. fixed-income analyst in Memphis, Tennessee, said in an interview. ``Cutting workers and the 401(k) match is pretty severe, but you have to do what you have to do to preserve cash.''

GM was considering a new round of cost reductions because a planned $15 billion in asset sales and savings won't be enough to maintain its liquidity, people familiar with the matter said yesterday. The drop in sales in the U.S. and Europe is spurring the effort to reexamine spending four months after its last effort was announced, the people said.

`Very Concerning'

``The global economic outlook remains very concerning,'' Chief Executive Officer Rick Wagoner and Chief Operating Officer Fritz Henderson said in the letter to executives. ``As a result, actions are being taken throughout GM's global operations to address our increasing need to conserve cash.''

Involuntary reductions in salaried and contract positions will begin later this year, GM said in the letter, without giving numbers. Dow Jones reported the letter earlier today.

GM had offered more than 9,000 salaried employees early retirement as part of a plan to get about 5,000 workers to leave by Nov. 1. Those retirement offers aren't yet complete.

``Virtually every economic forecast has been downgraded in the last several months because of the tremendous problems in the financial markets,'' said Dana Johnson, chief economist at Comerica Bank in Dallas. ``It's only logical that GM is making adjustments to its own plans.''

The global credit freeze threatens to send U.S. auto sales to a 27-year low in 2009, speeding GM's cash burn. The crisis also is driving merger talks with Chrysler owner Cerberus Capital Management LP, according to the people familiar with the matter.

Chrysler Discussions

Cerberus, a New York-based buyout firm, wants to keep a Chrysler stake in any merger and is willing to contribute cash to a new company, the people said. GM is pushing for an accord this month, one person said. While the talks are progressing, there isn't a framework for an agreement, the people said.

GM is the preferred partner for Chrysler even as Cerberus meets with Nissan Motor Co. and Renault SA, the people said.

Renee Rashid-Merem, a spokeswoman for GM, had no comment about any further savings initiatives. GM, Chrysler and Cerberus aren't commenting on the merger talks.

Chrysler today said it would eliminate about 1,800 jobs when it closes a Delaware plant a year early and eliminates a shift at a Jeep factory in Ohio because of the sales slowdown.

Investors haven't been reassured by the liquidity push at GM. The automaker's shares slumped 38 percent since announcing its $15 billion plan on July 15, outpacing the 21 percent slide for the Dow Jones Industrial Average.

GM fell 9 cents to $6.10 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have fallen 75 percent this year, the most in the 30-company Dow average.

Liquidity Plan

The $15 billion plan outlined in July called for saving $10 billion from cuts that included a 20 percent reduction in salaried-employee costs and eliminating a quarterly dividend, and $5 billion from asset sales or new debt.

That blueprint was intended to ensure that GM maintains the reserve of $11 billion to $14 billion needed for monthly bills. It also was based on a forecast for industrywide U.S. sales of about 14 million units, which is where GM may fall short.

The annual sales rate may tumble to 10 million this quarter and be as low as 11 million next year, Himanshu Patel, an analyst at JPMorgan Chase & Co. in New York, wrote in a report this week. Sales at the level of Patel's 2009 forecast would be the lowest since 1982's 10.4 million. This year's annual rate was 14.1 million through September. Sales totaled 16.1 million last year.

GM's reserves may fall below $12.5 billion by the second quarter, and it will need asset sales, federal loans, new debt or cash from a Chrysler merger to get through the rest of the year, Patel said. Cash and marketable securities slid 12 percent to $21 billion at the end of June from March 31, GM has said.

A month after disclosing the liquidity plan, GM said Aug. 13 it was trying to speed up the $10 billion in spending cuts. This month, it accelerated the projected closing date of two U.S. light-truck factories to December from 2010.

The automaker is trying to sell its medium-duty truck business, a French factory and its Hummer brand. GM also said yesterday that it's seeking a buyer for its ACDelco business, which makes replacement parts such as batteries and oil filters.

Last month, GM tapped the $3.4 billion left in a $4.5 billion credit line as debt markets began to seize up.

To contact the reporter on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

Last Updated: October 23, 2008 16:31 EDT