Shares of General Motors Corp. (GM) fell as much as 4 percent Thursday after a Wall Street analyst said the automaker may not get enough concessions from its leading labor union on health-care costs this year.

Rod Lache, an analyst with Deutsche Bank, said in a note to clients that "meaningful concessions will take more time and will probably not be achievable until the 2007 contract."

GM's current contract with the United Auto Workers (search) union is not due to expire until September 2007.

Lache added that the recent rally in GM shares "may prove disappointing."

Shares in the world's largest automaker gained this week on news that the UAW, which represents its U.S. hourly workers, was willing to work with GM to reduce employee health-care expenses, which will increase to $5.6 billion this year.

"GM's share price rise in response to possible UAW healthcare concessions is unwarranted, in our view," said Goldman Sachs analyst Robert Barry.

"Major concessions from the UAW are unlikely given GM is nowhere near bankruptcy, that it has a lot of new, high-margin product coming and that it has not cut the dividend," Barry said in a research note.

GM has kept its dividend at a 50 cents per share quarterly payout since the first quarter of 1997.

The UAW has ruled out reopening its current contract with GM to make any broad changes not allowed under the confines of the existing labor agreement.

Local union officials have said GM, which wants an agreement by the end of this month, could trigger a potentially crippling strike by the UAW if it pushed too hard to slash the health-care benefits it provides to union members.

"We recognize this process may not be moving as quickly as some people might like," UAW President Ron Gettelfinger and Vice President Richard Shoemaker said in a joint statement on Thursday.

"But we firmly believe that it is far more important to do things the right way than to rush to meet unrealistic expectations," they added.

GM posted a $1.1 billion first-quarter loss, and it is struggling to reverse declines in U.S. sales and market share. The company is the nation's leading private provider of health-care benefits and has said it urgently needs to reduce health-care spending.

Lache said GM is probably looking for savings of $300 million per year, but this cost sharing may be "unacceptable to the UAW at this juncture."

"All retiree health-care benefits appear to be off the table at this juncture," he added.

GM's shares fell 72 cents, or 1.98 percent, to close at $35.62 on the New York Stock Exchange (search).