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Last Updated: Monday, 17 October 2005, 15:27 GMT 16:27 UK
GM signs health deal with unions
GM Hummer
GM has seen its market share fall in its main US market
General Motors has signed an initial agreement with unions to reduce its healthcare expenses by $3bn (1.7bn) a year, sending its shares up 11%.

The jump in its share price came despite the firm also reporting a $1.6bn third quarter loss, compared to a $315m profit a year ago.

GM had long sought to reduce its expensive healthcare obligations, with talks starting back in the spring.

The US giant on Monday also reiterated plans to cut 25,000 jobs by 2008.

European improvement

Detroit-based GM has been hit by falling sales in the US, where it has struggled against tough competition from Japanese rivals, and a decline in sales of sports utility vehicles.

GM's US business lost $1.6bn during the quarter and saw its market share slip to 25.6% from 28.5% a year ago.

Overall worldwide group sales totalled $47bn, up from $44.8bn for the same period in 2004.

GM Europe saw losses narrow in the quarter to $150m compared to $236m a year ago.




BBC NEWS: VIDEO AND AUDIO
See Rick Wagoner announce General Motors losses



SEE ALSO:
US losses drive GM into the red
20 Jul 05 |  Business
GM plans to cut 25,000 jobs in US
07 Jun 05 |  Business


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