Rising pension expenses will force General Motors to make drastic North American cost cuts next year, chief financial officer John Devine said today, according to Reuters.

According to Reuters, GM said falling returns from US pension fund assets will increase its pension expenses by about $US1 billion next year.

“North America is now working on their (2003) business plan…they’re going to be very aggressive on cost reductions. The size of this pension will really require us to have an increase in structural cost next year for North America,” Devine said, according to Reuters.

Reuters said that Devine added that a change in ownership control of Fiat SpA would cancel a put option effective from 2004 which could force GM to take control of Fiat Auto.

“If there’s a change in control of Fiat SpA, then the put is automatically eliminated,” Devine said, according to Reuters.