General Motors will temporarily suspend matching payments into its employees’ 401(k) accounts as it struggles to raise liquid cash. The suspension of matching contributions will come into effect on November 1 this year, and will affect GM's entire North American workforce. Additionally, GM is reported to be evaluating the number of salaried workers it employs, with a view to lay off up to 5,000 employees in order to drastically cut its costs.

The move preserves the 401(k) accounts and allows workers to continue contributing into them as well, which has direct tax benefits and other advantages, reports Bloomberg. In addition to deferring the income - and its tax - to another year, the 401(k) allows workers to keep a single, central retirement savings account that is independent of the pension plans that used to be common in the American workplace.

GM CEO Rick Wagoner is counting on the company's cost cutting measures to raise around $15 billion, the amount required to keep GM operating even if vehicle sales fall to 14 million vehicles in the U.S. market. While last year the U.S. market bought over 16 million vehicles, only 13.4 million vehicles are expected to be sold next year, which could be dangerous for GM's financial stability.

Other cast saving measures are being undertaken by the General in order to stay afloat until 2010, including delaying important new models. A source from GM has stated that the Chevrolet Cruze compact car will be delayed by around a year, giving it a 2011 debut, while the Chevrolet Malibu may also be held back for around 6 months until 2013. The company is also closing plants to cut overhead and align supply with demand.

Additionally the Cadillac CTS Coupe and the Buick LaCrosse have been held back as well. Both were set to debut at the LA Auto Show in November, but will now be making their inaugural appearances at the Detroit Show early next year.