General Motors Co. (NYSE:GM, PINK:MTLQQ) said it will pay its European division employees about $1.4 billion in the event it doesn’t follow-through on its commitments to invest billions in new cars and trucks there through 2014, according to a regulatory filling, reported the Wall Street Journal.

The company said they expect to have a final deal with European labor unions by the end of September, 2010.

The company is clearing the path for its inevitable return to the public markets.

General Motors Co. is likely to file paperwork next week that will describe its plan to sell shares to the public, said a person familiar with the matter on Friday.

Currently, General Motors does not have a stock symbol because shares of the company are not publicly traded following the company’s bankruptcy.

When the company offers its Initial Public Offering later this year, it will then get a stock symbol, based on what exchange the company lists its shares on.

Before General Motors went into bankruptcy it pushed many of its bad assets into a new entity called Motors Liquidation Company.

That company trades on the Pink Sheets with the stock symbok of MTLQQ. Please be very aware, that stock symbol has nothing to do with the new General Motors.

The question of how to keep GM alive is becoming increasingly complex as expense rise and losses mount. So far Uncle Sam has already lent the company $13.4 billion. Last week GM said they’d need at least $30 billion more to keep operational. Even with this giant influx of money, there’s no guarantee GM will stay afloat.

Rick Wagoner, a master of the obvious, said that 2008 “was an extremely difficult year for the U.S. and global auto markets, especially the second half.”

Not only that, Wagoner said he doesn’t expect things to get much better the rest of the way this year.

“These conditions created a very challenging environment for GM and other automakers, and led us to take further aggressive and difficult measures to restructure our business,” he said. “We expect these challenging conditions will continue through 2009.”

2008 ended with an 11 percent decline in GM sales. The company sold a total of 8.35 million cars worldwide.

GM stated that they might be downgraded by auditors. They expect to receive a “going concern” notice from auditors who are expected to decide whether the company can move forward, with or without government help.

Almost all metrics by which GM could be judged are down. Revenue for the latest quarter dove from $46.8 billion to $30.8 billion. The net loss went from $722 million to $9.6 billion.

GM’s announcement included plans to suspend their quarterly dividend payouts, layoff 20% of their salaried staff and to sell off up to $7 billion dollars worth of assets. GM also said that they’re going to cut health care benefits to U.S. salaried retirees older than 65, effective Jan. 1, 2009.

High oil prices and the consumer credit crunch have came back to haunt the 100 year old company that was making and marketing large vehicles like the Hummer and other gas guzzling SUV’s. Without consumer financing options for many and gas prices over $4.00 dollars a gallon, what was once their most profitable division has become an albatross around their neck with no simple solution in sight.

In June, GM announced plans to shutter four United States manufacturing plants and discontinue making the Hummer, a vehicle that was once just for use by the US military.

GM Chief Executive Rick Wagoner said “We need to take some very tough actions to ensure our survival and success.”

General Motors is based in Detroit, Michigan and hasn’t posted a profit since 2005. The company saw an overall 16% decline in sales for the first six months of 2008.

Adding to the sell pressure today for GM is a downgrade by Goldman Sachs (NYSE:GS). Remarkably enough, GM’s new market cap is less than the company’s market cap was in the 1950s, before current CEO Rick Wagonner was born. Not many CEOs can say that, especially employed ones.

Worse yet, GM stock this year is down an abysmal 54%. Few companies around are experiencing the type of disintegration that General Motors is in 2008.