General Motors bought itself some time by reaching an agreement with its unions to shift some of the costs of health insurance to workers.

Even though the agreement will save GM $1 billion a year, about one-sixth of its total health care outlay for its 750,000 hourly workers, retirees and their dependents, it’s a temporary solution at best.

GM, the largest U.S. automaker, reported losses of $1.6 billion in the third quarter of this year alone, bringing yearly losses to nearly $3 billion. The agreement with the United Auto Workers will help, but the real challenge for GM is to build cars that people want to buy.

GM is caught right now behind the curve. Perhaps its most famous – and notorious – product is the Hummer and its two somewhat smaller variants, the H2 and the H3, which is still bigger than most of the other SUVs on the market. With gasoline prices fluctuating between $2.50 and $3 a gallon, the car-buying public has reacted by losing its appetite for large, fuel-guzzling automobiles. According to The Boston Globe, sales of SUVs nationally dropped 33 percent in September. GM, meanwhile, continues to brag about controlling 62 percent of the large SUV market.

In the deal with the UAW, workers and retirees will pick up the tab for more of their health insurance premiums. Workers now pay between 7 percent and 27 percent of their premiums, figures that are sure to increase.

The trouble is, the concession by the union will only temporarily help GM. Health care costs, and subsequently health insurance premiums, grow annually by double digits. If nothing changes, the value of the deal will erode in just a few years.

For General Motors to survive, and perhaps even prosper again, it must recognize the reality of $3 a gallon gasoline. The days of $1-a-gallon gas, which made the purchase of a large SUV practical for many families, are gone. General Motors should use its market muscle to capture emerging automobile trends, not to hang onto the dinosaurs of the past.

Even then, though, the hurdle of health care costs will continue to act as an anchor on GM and other large American companies that must face foreign competitors that don’t carry the same burden. Until General Motors can shed its health care liabilities or at least bring costs under control, it will be one step behind Japanese and European automakers. Transferring the pain to workers will only work for a little while.