Detroit, Oct. 17 (Reuters): General Motors Corp. on Monday announced a deal with the United Auto Workers union to slash its multi-billion-dollar health-care costs, sending its shares up as much as 13 per cent even as it posted a fourth straight quarterly loss.

The cash-strapped automaker said the pact would reduce its employee health-care expenses by $3 billion annually before taxes.

“This is a huge move,” said GM chairman Rick Wagoner, who has been under pressure to stop the financial bleeding at the world's biggest automaker and pull its crucial North American operations back to profitability.

He called the UAW deal on health care, which analysts said could be replicated at Ford Motor Co. and the Chrysler arm of Germany's DaimlerChrysler, “the single biggest cost reduction” in GM history.

GM also said it was exploring the sale of a controlling interest in its profitable finance arm, aimed at restoring General Motors Acceptance Corp.'s investment-grade rating and renewing access to low-cost financing.

“Plans to sell a controlling GMAC stake would likely boost credit ratings and cut funding costs,” said Goldman Sachs analyst Robert Barry. But he also said such a sale would “divert earnings from GM.”

GMAC posted record third-quarter earnings of $675 million on strong results from its mortgage operations.

Pressure on GM is intense, with its main auto parts supplier in bankruptcy, imports cutting into its market share, sales of sport utility vehicles stalled, and raw material costs rising.

Highlighting what it described as GM's “very poor” third-quarter results, Standard & Poor's warned that it may cut the company's debt rating further into high-yield, or “junk,” territory.