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GM reverses itself, says will cover striking workers' health benefits

Auto workers strike against GM
Auto workers strike against GM 01:53

General Motors says the company will now pay for striking workers' health insurance, nine days after saying coverage would be cut off.

In an email to the United Auto Workers union, GM said that it will keep benefits in place due to what it called significant confusion among members. The letter says employee health and well-being are GM's top priorities.

"GM has chosen to work with our providers to keep all benefits fully in place for striking hourly employees, so they have no disruption to their medical care, including vision, prescription and dental coverage," the letter says.

After the strike began on September 16, the company said it would end benefits, to the fury of workers and politicians alike.

It's standard procedure for health care costs to shift to the union in a strike. The United Auto Workers' website says the union would pick up the cost of premiums.

Jason Kaplan, a spokesperson with the UAW, painted the company's turnaround as a victory: "General Motors thought they could leverage healthcare for tens of thousands of UAW GM workers to force the union to concede to unfair concessions. The only thing GM gained was a tarnished reputation," he said in a statement.

The strike by about 49,000 factory workers has shut down production at more than 30 GM factories. Talks continued Thursday.

The company's health benefits had been one of the major areas of discussion before the strike. GM spends about $900 million on health benefits for the roughly 49,000 hourly employees and their 69,000 dependents, the company has previously stated.

GM's initial offer had called for workers to cover 15% of their health costs, well beneath the national average of 28% but about five times higher than the 3% to 4% that autoworkers now pay, according to Automotive News, which cited sources familiar with the talks. 

The UAW balked at the proposal, prompting GM to step back and offer to maintain the status quo, the industry publication reported.

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