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San Francisco, April 1: General Motors Corp. said on Friday a federal court had approved a deal with the United Auto Workers that will allow the struggling automaker to save $1 billion a year in healthcare costs.

GM said the decision by the U.S. District Court in Detroit means the company can immediately start to overhaul its healthcare plan for hourly retirees, a key part of its plan to return to profitability.

The plan, struck between GM and the UAW union last October, was widely expected to win court approval.

''To me it was a foregone conclusion because the union and the company had already agreed to it,'' said David Healy, an analyst with Burnham Securities.

''The agreement was really putting GM's healthcare plan closer to the average corporate healthcare plan. I couldn't imagine any judge opposing it.'' GM, the largest single private health-care provider in the United States, said it expected the changes to the plan, which it says will save it $15 billion in long-term medical liabilities, will be implemented by June 1.

Under the deal, hourly retirees would have to pay monthly contributions, annual deductibles and coinsurance costs for the first time, amounting to $370 a year.

Shares in GM closed up 1 percent at $21.27 on the New York Stock Exchange on Friday before the court decision was announced. The stock has fallen nearly 28 percent over the past year.

Reuters