General Motors Corp. workers will be unable to buy GM shares through
two employee savings programs indefinitely because the plans'
administrator believes additional investments are not appropriate based
on the automaker's financial situation.
GM initially
suspended employee purchases of the company's shares within the savings
plans on Sept. 30, saying workers had bought all the available
registered shares.
GM said in a regulatory filing Tuesday
that it had planned to register additional shares with the Securities
and Exchange Commission and expected to lift the blackout in the week
of Nov. 9. But State Street Bank and Trust Co., which independently
oversees GM's employee stock fund, said any more investments by plan
participants are not appropriate "due to GM's recent earnings
announcement and related information about GM's business."
Earlier
this month, GM posted a third-quarter loss of $2.5 billion. The company
has said its cash burn has accelerated so rapidly that it may not
survive into next year without government help.
That has
driven GM's share price as low as $1.70, their lowest price in more
than 70 years. Shares of GM fell 23 cents, or 6.4 percent, to $3.36 in
afternoon trading Tuesday.
GM notified its directors and
executive officers in September that they cannot buy or dispose of any
GM equity securities that were acquired in connection with their
employment. The Sarbanes-Oxley Act generally prohibits directors and
officers from trading in their company's stock when most participants
in the company's stock plans are not able to purchase or sell stock.
GM's
SEC filing Tuesday said that restriction will continue. Other
participants in the plan, however, are still allowed to sell stock and
may also exchange shares for other investment options or change their
contribution election, GM said.