General Motors has suspended its dividend and is considering asset sales as part of a "self-help" plan to improve liquidity in the face of a downturn in the North American vehicle market.

"Our progress has been threatened as US economic conditions have become more difficult," Rick Wagoner, GM's chief executive, told employees yesterday.

GM last month said it would close four North American plants. But Mr Wagoner said that "in the past six weeks, US markets and economic conditions have continued to decline". A sharp drop in GM's share price and speculation about a possible bankruptcy filing have complicated efforts to raise capital.

The measures unveiled, based mostly on internal cost-cutting, are designed to generate $15bn (£7.5bn) in cash by the end of 2009.

GM's automotive operations held cash reserves of $23.9bn at the end of March. They assume a drop in US light-vehicle sales to 14m this year and next. Sales totalled 16.3m in 2007, but fell to an annual rate of 13.6m in June.

GM said it would delay development of big pick-up trucks and 4x4s, and cut salaried staff expenses in the US and Canada by a fifth by the end of 2009. Salaries have been frozen for 2008 and 2009, and senior executives will receive no cash bonuses. GM Europe also faces belt-tightening.

GM is assessing assets for possible sale with the aim of generating $2.4bn of liquidity. The plan envisages GM raising at least $2bn-$3bn on capital markets. GM said it had unencumbered assets valued at $20bn that could back a bigger secured debt offering if conditions improved.

GM shares are at their lowest level in more than half a century. They fell another 3 per cent to $9.65 in early trading yesterday.

Patrick Archambault, an analyst at Goldman Sachs, said: "GM's current plan puts a lot of emphasis on delivering cash savings from operating measures, and in the current environment investors remain sceptical."

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