General Motors Corp. and the United Auto Workers reached a tentative agreement early today to reduce GM’s health-care costs significantly while maintaining high quality health-care benefits for its hourly employees and retirees in the United States.
The tentative agreement, subject to finalized language and UAW-GM member ratification, is projected to reduce GM's retiree health-care (OPEB) liabilities by about $15 billion, or 25 percent of the company’s hourly health-care liability, and cut GM's annual employee health-care expense by about $3 billion on a pre-tax basis. Cash savings are estimated to be about $1 billion a year. the modified plan will continue to provide health care for GM’s more than 750,000 U.S. hourly employees and dependents, retirees and surviving spouses. Additionally, GM and the UAW have agreed to continue to look at other options to further reduce health-care expenses and to improve other areas of competitiveness.