On Jan. 10, when the International Auto Show was being held in Detroit, billionaire investor Kirk Kerkorian's front man, Jerome York, made a speech to analysts in which he said General Motors (NYSE:GM) needed to get into crisis mode. Two measures York proposed that day -- cutting the dividend and trimming executive salaries -- have come to fruition. Today, GM unveiled the actions it's taking to assist its North American turnaround.

Dividend cut
GM will reduce its dividend rate by 50%, to $1.00 per share annually. That will save $565.5 million a year and reduce the yield on GM's shares to 4.4%. Many have suggested that a big dividend cut like this would cause GM shares to collapse, but that effect remains to be seen.

Investors of a Foolish persuasion, like this observer, are still asking why a money-losing operation, rumored to be a candidate for bankruptcy, would be paying a dividend in the first place -- especially after posting a significant loss in 2005. Isn't being a financially sound company the most important objective? If it is, paying $565.5 million in 2006 dividends makes little sense.

Executive pay cuts
In the "this really makes sense" department, GM's top five executives took salary reductions ranging from 10% to 50%. Board members voluntarily reduced their compensation by 50%. Non-employee directors will forgo cash compensation and will retain some of the stock portion of their annual retainer.

This is a clear sign to the unions that management "gets it." These cuts certainly make it obvious that management is in crisis mode, although don't kid yourself that these people will not be richly rewarded if the company pulls itself out of its North American tailspin.

U.S. salary benefit change
Although these changes will not be announced until next month, GM announced it will be implementing a plan that "substantially alters the pension benefits for current U.S. salaried employees" while reducing the financial risk to the company.

Capped salaried retiree health care
Salaried employees hired before 1993 are eligible for special health-care benefits. GM will cap its contributions to the level of its 2006 expenditures. Obviously, this will not produce cash for GM immediately, but the company expects the cash savings to grow to about $200 million within five years.

These actions are part of GM's plan to reduce its North American structural costs by $6 billion on a running-rate basis by the end of 2006. Additionally, GM plans to reduce global structural costs to 25% of automobile revenue by 2010 (from 34% in 2005).

There are still actions York recommended that may be coming. Unfortunately, it's unlikely we'll hear York speaking so pointedly in the future because he was elected to the GM board yesterday -- replacing Merrill Lynch's CEO, who resigned.

How might York be important to GM shareholders? He has auto-industry experience as CFO of Chrysler. His experience also includes a stint as CFO for IBM, and he currently holds seats on the boards of Tyco and Apple Computer. I can't help thinking GM only stands to benefit from an individual with such vast experience.

So what else did York propose for GM back in January? He wanted the CEO to set firm financial targets the way Nissan's (NASDAQ:NSANY) CEO did in 1999. To this Foolish observer, that is just plain common sense. York also wants to see the company review its operations with the thought of selling the money-losing Saab brand and its profitable Hummer line, so that management has the time to focus on its gigantic core operations. Again, that's just good common sense, too.

The bottom line is that GM has made moves today that indicate it has indeed entered crisis mode. Better yet, it has embraced a critic who has the experience to challenge the status quo and bring common logic to the turnaround process. For now, GM appears to be on the right path. But for investors, the stock is still a speculative investment -- although one that's starting to look as though it's finally starting to get its house in order.

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Fool contributor W.D. Crotty does not own any shares in the companies mentioned. Click here to see The Motley Fool's disclosure policy.