No GM Buyback or Dividend Seen as Pension Gap Freezes Cash: Cars

General Motors Co., holding cash until it learns the magnitude of retiree obligations at year-end, may find a pension deficit that rivals its market valuation and delays a buyback or dividend.

GM’s pension shortfall may reach $35 billion when calculated using lower asset returns and a reduced rate for valuing future payments, estimates Kenneth Hackel, president of CT Capital LLC in Short Hills, New Jersey. GM’s market capitalization sank as low as $33.1 billion last month.