On the tone, you will have no health insurance --- BEEEP!

The US economy

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a General Motors notice to some of its retirees

July 2008

Dear Salaried Retiree or Surviving Spouse:

Since the first of this year, U.S. market and economic conditions have become significantly more difficult. These conditions, along with the rapid change in automotive industry sales mix, require us to take further actions that will position GM for sustainable profitability and growth. As a result, GM is announcing a change to the General Motors Salaried Health Care Program.

Effective January 1, 2009, GM is canceling health care coverage for salaried retirees and their dependents age 65 or older. Instead, eligible salaried retirees and surviving spouses over age 65 will receive a monthly pension increase of $300. This pension increase is designed to help offset some of your health care costs in retirement.

Eligible salaried retirees, surviving spouses and their dependents, who are pre-age 65, may continue to participate in the General Motors Salaried Health Care Program until they turn age 65. This Program remains subject to the Salaried Retiree Health Care Cap that became effective January 1, 2007.

You will receive additional information about the change to the General Motors Salaried Health Care Program in the months ahead. In addition, beginning in October, GM will contract with a company called Extend Health to help you learn more about individual Medicare health care plans such as Medigap or Medicare Advantage that are available in the marketplace. Attached is a list of questions and answers to help clarify the changes. We recognize that this change will require more of your personal attention in managing your health care in retirement. Extend Health will support your needs during this time by helping you to enroll in a new health care plan.

This is a very difficult decision for the Company to make; however, it is necessary to take this action given today's economic conditions. As hard as this action is, we are doing what is necessary to position GM for future success. We ask for your understanding and continued support.

Sincerely,

Kathleen S. Barclay Vice President

Global Human Resources