GM Workers OK Healthcare Cost Deal

DETROIT – Unionized workers at General Motors Corp. (GM), the world's largest auto maker, have ratified a landmark deal to help the automaker cut its massive health-care costs, the United Auto Workers union said on Friday.

The deal, which shifts some of GM's costs to hourly GM workers, has been approved the UAW leadership. The rank-and-file voting began last week, and the union said 61 percent voted in favor.

GM, also the largest U.S. private health-care provider, has said it will save $1 billion annually and slash its long-term costs by $15 billion.

Under terms of the deal, which GM said would cut its hourly health-care liability by 25 percent, health care will no longer be free for hundreds of thousands of hourly retirees, their spouses and dependents.

Instead, most will pay a maximum of $752 per year for their family health-care coverage, including monthly premiums. Drug co-payments are not included.

Retirees with annual GM pensions of $8,000 and less, whose GM pension benefit rate is $33.33 per month per year of service or less, will continue to get health care free of charge.

Coverage for GM hourly employees will continue with few changes, although drug co-payments will go up by $5 in most cases, and they will be required to defer or forgo $1 an hour in future pay increases to help fund their health-care coverage.

The GM-UAW health-care agreement will remain in effect until 2007, when the union's labor contract with GM comes up for renewal.

The proposed changes are subject to approval by the U.S. District Court for the Eastern District of Michigan.