Shares of General Motors Corp. (GM) rose Friday, following a meeting between the world's largest auto maker and United Auto Workers (search) leaders in Detroit that indicated GM might get some wiggle room on cutting employee health-care costs.

In New York Stock Exchange (search) trading, GM shares were at $34.37, up $2.57, or 8 percent. The shares are up substantially from decade-low of $24.67 hit in April.

Richard Shoemaker, head of the UAW delegation, repeated Thursday that the union won't reopen its contract with GM, which expires in September 2007.

But leaders of local unions from around the country said after the meeting that they would consider picking up more of the tab for their own health care to help GM cut costs. It's possible, they said, to make some changes within the current contract.

At GM's annual shareholders meeting Tuesday, Rick Wagoner (search), the company's chief executive, said GM plans to cut 25,000 union jobs in the United States by 2008.

Some union leaders reportedly were surprised by the announcement, although GM said most of the cuts would come through attrition as older workers retire.

Wagoner told shareholders that GM has targeted cutting employee health-care costs as one of the most critical challenges to "fixing" its money-losing operations in North America.

In 2005, the auto maker expects to spend more than $5.5 billion just on health care, GM has said. That's $1,500 for each vehicle that GM makes.

UAW workers under GM's health-care plan pay 7 percent of their health-care costs, according to GM, compared with 27 percent for white-collar employees at the company.

Health-care plans cover both current employees and retirees and their dependents.

Any concessions the union makes without formally opening its contract are likely to be modest, around 5 percent, warned analyst Himanshu Patel at JP Morgan in a report Friday. Still, he wrote, "they potentially pave the way for more substantial concessions when the current contract is renegotiated."

The analyst has an "overweight" rating on GM. He thinks GM shares could rise for several reasons. First, the auto maker has a new platform of trucks and sport utilities coming on the market, beginning later this year. In addition, GM may sell some parts of GMAC, its money-making finance arm. The analyst said GM's plans for North American restructuring should be positive news.

Shares of auto parts makers were also up Friday. Lear Corp. climbed $1.85, or 4.9 percent, to $39.60; ArvinMeritor Inc. was at $18.51, up 91 cents or 5.2 percent; and BorgWarner Inc. rose $1.77, or 3.4 percent, to $54.42.