UAW Leadership Endorses GM Health Care Deal

The United Auto Workers (search) union on Thursday said its leadership had unanimously endorsed a deal with General Motors Corp. (GM) allowing the automaker to slash its multibillion-dollar health-care costs by cutting benefits for UAW-protected blue-collar workers and retirees.

UAW President Ron Gettelfinger (search) announced the endorsement of the deal, which GM made public on Monday, after a closed-door meeting with local union officials from across the country.

Reading from the text of a prepared statement, Gettelfinger said the tentative health-care agreement, which must still be ratified by the UAW's rank and file, was "subject to acceptable resolution of outstanding issues," however.

Gettelfinger and Richard Shoemaker, the union official responsible for negotiations with GM, declined to elaborate on what the outstanding issues were.

Speaking at a joint news conference, they also declined to say when the agreement would be put to union members for ratification.

Under terms of the deal — which GM has said would reduce its retiree health-care benefits by about $15 billion and result in a 25 percent cut in the company's hourly health-care liability — health care will no longer be free for GM's hundreds of thousands of hourly retirees, their spouses and dependents.

But most will be required to pay no more than a maximum of $752 per year for their family health-care coverage, including monthly premiums and drug co-payments, according to the UAW.

It said retirees with GM pension incomes 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 their health care free of charge.

Coverage for active 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 the world's largest automaker comes up for renewal.

"UAW-GM active workers and retirees have long enjoyed some of the best health-care coverage of any industrial workers in America," Gettelfinger told the news conference. "They will continue to do so under the terms of the tentative agreement.

Gettelfinger and Shoemaker both declined to comment on demands from Ford Motor Co. (F) and the Chrysler side of DaimlerChrysler that the UAW offer them the same deal on health care that the union reached with GM.

"Right now I'm just focused on this agreement," Gettelfinger said.

GM said on Monday that the its pact with the UAW would reduce its employee health-care expenses by $3 billion annually before taxes.