Urgent Care

General Motors Corp., just prior to posting a deficit of $1.6 billion for July-September on Oct. 17, reaches a tentative agreement with the United Auto Workers union to reduce the auto maker's mammoth health-care costs, estimated at $5.6 billion for 2005.

Local UAW leaders approved the pact Oct. 20, but the UAW's active GM personnel, which totals roughly 120,000, still must OK the deal.

“I suspect that since the leaders who have seen it to date have endorsed it, that bodes well for a ratification,” Harley Shaiken, a labor expert and University of California at Berkeley professor, tells Ward's.

If ratified, active UAW-GM workers will forego $1 an hour in future pay increases and the 3% wage increase scheduled for September 2006, says UAW President Ron Gettelfinger.

“Most UAW-GM retirees will be required to pay modest monthly premiums of $10 for individual coverage and $21 for family coverage. Deductibles and co-pays will be implemented,” Gettelfinger says.

The agreement is projected to reduce GM's health-care liabilities by about $15 billion and cut GM's annual health-care expense by about $3 billion. Cash savings are estimated to be about $1 billion a year.

Considering the benefits lost by other union workers in recent years, Shaiken says the UAW adequately protected its members and retirees while helping GM.