Judge OKs GM-UAW Health Care Deal

DETROIT – A federal judge granted preliminary approval Thursday to an agreement between General Motors Corp. (GM) and the United Auto Workers that would require hourly workers and retirees to pay more for their health care, the automaker said.

The action came as Ford Motor Co. (F) workers were scheduled to finish voting on a similar health care deal with the UAW. The union announced the tentative agreement with Ford earlier this month and asked local unions to vote on the agreement by Thursday. The agreement can't take effect without workers' approval.

GM hourly workers ratified their agreement last month, but the changes affecting retirees require the court's approval. On Thursday, U.S. District Judge Robert Cleland gave preliminary approval and said formal notices should be sent to retirees and surviving spouses. He scheduled a March 6 hearing on the fairness of the agreement.

The UAW negotiated both agreements as GM and Ford continue to suffer from falling U.S. market share and growing health care costs. The UAW also has begin negotiating a similar agreement with DaimlerChrysler AG (DCX). The three automakers expect to spend around $11 billion on health care this year for their employees.

Under the agreements, retired autoworkers would start paying monthly contributions, annual deductibles and co-payments for some medical services up to a maximum of $370 a year for individuals and $752 for a family. They don't pay such fees now.

Hourly workers won't be required to pay deductibles or monthly contributions, but they will have to contribute future wage increases to a trust for future health care expenses. The agreements also raise the cost of prescription drugs and institutes a $50 emergency room fee for retirees.

Both the Ford and GM agreements exempt retirees whose pension incomes are $8,000 a year or less.

Ford shares fell 3 cents to $7.99 on the New York Stock Exchange. GM shares dropped 33 cents, or 1.7 percent, to $18.72 in afternoon trading on the NYSE as fallout continued from billionaire investor Kirk Kerkorian's decision to sell 12 million shares in the company.