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GM nears crucial deal with UAW

Wall Street Journal, May 15, 2009

General Motors Corp. is near a deal that would cut its hourly labor costs by more than $1 billion a year and reduce its $20 billion pledge to the United Auto Workers to cover healthcare obligations, said people familiar with the matter. GM expects to halve its remaining cash outlays for retiree health costs to about $10 billion, and supplement that contribution with a 39% equity stake in the reorganized GM. Cutting GM's healthcare costs is an essential part of the "controlled bankruptcy" plan the Treasury Department is formulating for GM.