Hourly workers at General Motors Corp. have approved a plan that would increase the amount they pay for health insurance, the United Auto Workers said yesterday.

The agreement, announced Oct. 17, takes effect immediately for active workers and will cut the Detroit company's cash outlays for health care by $1 billion annually and its long-term medical liability for retirees by $15 billion.

GM chief executive officer Rick Wagoner made cuts in health-care costs his top goal this year, saying the tab puts his company at a $1,500-per-vehicle disadvantage against Toyota Motor Corp. and other rivals.

GM shares rose 7.5 percent on the day the agreement was announced - the same day it announced a $1.63 billion third-quarter loss. The stock is down 19 percent since then amid news of debt downgrades and earnings restatements.

On Oct. 27, the automaker received subpoenas from the Securities and Exchange Commission concerning its reporting of pensions and other retiree benefits. GM's October U.S. auto sales dropped 26 percent. Moody's Investors Service and Fitch Ratings lowered their ratings on GM debt this month two levels further below investment grade.

But the fact that just 61 percent of the voting members approved the deal may mean workers will balk at more concessions, said Kevin Tynan, an analyst with Argus Research in New York.

Under the deal, GM will contribute $3 billion by 2011 - $1 billion a year in 2006, 2007 and 2011 - to a fund created to lessen the impact of the changes on retirees. Active hourly workers will defer about $1 an hour in future cost-of-living adjustments and planned wage increases, and that money will go into the new fund.

The changes for hourly workers include some revisions in the rules for prescription drugs. The changes for retirees must wait for federal court approval, which should come early next year, Weinmann said.

UAW retirees who have annual pension incomes of $8,000 or less and whose GM pension benefit rate is $33.33 per month per year of service or less won't be affected by the changes, the union said. About one-third of the UAW retirees and surviving spouses meet those guidelines, the union said.

If the plan is affirmed by a federal judge in Detroit, retirees would pay as much as $752 per family each year for their health care. They previously had no out-of-pocket costs for health-care insurance premiums.

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