GM to take at least $1 billion charge for health plan

General Motors Corp. said it will take either a $1 billion or a $3 billion charge in the first quarter as part of a new healthcare plan expected to save the company up to $13 billion over six years. Under a class-action settlement approved March 31, GM must contribute $1 billion each year in 2006, 2007 and 2011 to a healthcare fund for retired hourly workers. The contributions will mitigate some of the financial burden for GM retirees imposed by the new healthcare plan, which also affects current GM employees. In a Securities and Exchange Commission filing, GM said its total cost savings over the six-year settlement period could be less than $13 billion if it makes supplemental contributions to the retiree plan. The company said it was working with the SEC to determine how to expense the required contributions. -- by Mark Taylor