GO
Loading...

Enter multiple symbols separated by commas

General Motors to Seek Fewer Healthcare Liabilities From Union

General Motors will try to reduce its staggering employee and retiree health care liabilities in upcoming contract talks with the United Auto Workers, according to a government regulatory filing Thursday.

The world's largest automaker said its obligation for post-retirement health care and other benefits was $68 billion at the end of last year and could grow on a global basis.

The Detroit-based company said in its annual report filed with the U.S. Securities and Exchange Commission that it spent $4.8 billion on health care in the U.S. last year, and that is expected to drop only slightly to $4.7 billion this year.

"We must continue to make structural changes to reduce our U.S. health-care cost burden, the source of our largest competitive cost disadvantage," the company said in the filing.

GM said it needs to continue to reduce structural and material costs, and its production must become more efficient in order to return to profitability. But it said restrictions in labor agreements could limit cost savings.

"Our current collective bargaining agreement with the UAW will expire in September 2007, and we intend to pursue our cost-reduction goals vigorously in negotiating the new agreement," the company said, adding that a UAW strike or threat of a strike could affect its business and impair further cost reductions.

GM said it provides extensive pension and retiree health care benefits to more than 400,000 retirees and surviving spouses in the U.S.

In the filing, the company pointed out that the UAW agreed to retiree health-care cost sharing in 2005 that reduced its post-retirement health care obligations by $17 billion, and it capped salaried retiree health care spending levels effective in January.

A UAW spokesman declined to comment on the filing.

On Wednesday, GM reported a fourth-quarter profit of $950 million but lost $2 billion for all of 2006. It also lost $10.4 billion in 2005, and is in the midst of shedding thousands of jobs and closing plants to shrink its factory capacity to be more competitive with Asian automakers, mainly Toyota Motor .

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.