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Last Updated: Friday, 11 November 2005, 19:31 GMT
GM workers agree healthcare deal
GM production line
GM has been hit by falling sales
Workers at General Motors have agreed to a deal that will cut the carmaker's huge healthcare bill.

GM had agreed the deal with unions last month, and the United Auto Workers (UAW) union said on Friday that 61% of hourly workers had voted in favour.

The deal will see hourly workers begin paying towards healthcare provision that had previously been free.

GM said the deal would save it $1bn (571m) a year and cut its long-term healthcare liability by $15bn.

The proposed changes still need to be approved by a US district court, the UAW union said.

"The deal is definitely a positive effect on GM," Burnham Securities analyst David Healy told the Reuters news agency.

"It's one of the reasons why GM will lose less money in 2006."

Sales pressure

GM has been hit by falling sales in the US, where it has faced tough competition from Japanese rivals.

It has also been hit in the US by an over-reliance upon Sports Utility Vehicles (SUVs), sales of which have dropped as petrol prices have risen.

Last month it announced a third-quarter loss of $1.6bn, compared with a profit of $315m for the same period a year ago.

There was further bad news from GM earlier this week when it said it would have to restate its 2001 financial results by between $300m and $400m.

GM said the restatement was needed because of an accounting error that caused net income figures to be exaggerated by 25%-35%.




SEE ALSO:
GM reveals $300m accounting error
10 Nov 05 |  Business
GM accounts probed by regulators
27 Oct 05 |  Business
Toyota 'could outstrip GM output'
26 Oct 05 |  Business
Ford plans shake-up after losses
20 Oct 05 |  Business
GM signs health deal with unions
17 Oct 05 |  Business
Ford and GM vehicle sales plummet
03 Oct 05 |  Business


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