Negotiators bargained until the early hours this morning and were reportedly close to reaching a contract agreement that would end a US-wide strike by 73,000 General Motors workers.
The unexpected strike, which saw 73,000 factory workers take to picket lines, came after a 10-week round of contract talks seen as crucial to GM's survival as it restructures its loss-making US operations and seeks to cut itself free from a health-care obligation of over $50 billion.
The United Auto Workers and General Motors Corporation have agreed a tentative contract that ends the two-day national strike - the carmaker's first in 37 years.
GM and the UAW confirmed that the deal creates a GM-funded, UAW-run trust to administer retiree health care. The two sides gave no other details, but source said it also would give workers bonuses and lump-sum payments and would pay newly hired workers at lower rates.
The union said the agreement with the nation's largest automaker was reached shortly after 3 a.m. The UAW canceled the strike about an hour later and some workers could return as early as this afternoon.
The contract must be reviewed by local UAW presidents and will then be subject to a vote of GM's 74,000 rank-and-file members. The agreement is expected to set a pattern for contracts at Ford Motor Co. and Chrysler LLC.
The deal means UAW workers will head back to their jobs at around 80 GM facilities across the nation. The union went on strike on Monday when talks broke down, ending GM's production and causing layoffs and shutdowns at parts factories.
It was the first nationwide strike against GM during auto contract negotiations since 1970. The UAW last struck GM in 1998, when a 54-day strike at two plants shut down production across the country.
GM said in a statement that the deal will make it significantly more competitive and provides "the basis for maintaining and strengthening its core manufacturing base in the United States."
The company went into the negotiations seeking to cut or erase what it said is about a $25-per-hour labor cost disparity with its Japanese competitors.
The deal includes GM's top priority in the negotiations - shifting most of its $51 billion unfunded retiree health care obligation to a UAW-run trust. According to reports, GM would pay about 70 per cent of that obligation, or $36 billion, into the trust, called a Voluntary Employees Beneficiary Association.