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Non-Tech : GM - General Motors
GM 68.86+0.1%Nov 6 3:59 PM EST
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From: Don Green10/17/2005 11:15:54 PM
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GM, Amid Industry Overhaul,
Cuts Health Benefits for Retirees

As Foreign Rivals Hurt Sales,
Detroit Begins to Tackle
Deep Structural Problems
'Choice Between Bad and Worse'
By LEE HAWKINS JR., NEAL E. BOUDETTE and KRIS MAHER
Staff Reporters of THE WALL STREET JOURNAL
October 18, 2005

DETROIT -- Accelerating a deep restructuring of the U.S. auto industry, General Motors Corp. said it will slash health-care coverage for unionized retirees, pushing the United Auto Workers to make one of its biggest concessions since the early 1980s. GM also said it would try to sell a big stake in its lucrative financing business.

The moves came as the world's largest auto maker posted a third-quarter loss of $1.63 billion, with sales of the trucks and sport-utility vehicles that make up most of its profit continuing to deteriorate.

GM's plan, which it called the biggest cost reduction it has announced in a single day, is just the latest convulsion of an industry in the throes of a rapid transformation. Sales for U.S. auto makers are being squeezed by foreign rivals such as Toyota Motor Corp. That has exposed many of the industry's deep structural problems, including high labor costs and soaring pension and health-care expenses for hundreds of thousands of retirees.
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