GM Generali

General Motors Corp. (GM) confirmed it reached a tentative new labor agreement with the United Auto Workers, clearing a major benchmark the auto maker is expected to reach as part of its restructuring plan.

GM, which is surviving on federal loans, is racing to restructure by June 1 under close watch of the Obama administration. Still, there is speculation the company could enter into bankruptcy court in as little as 30 days.

On Friday, the company said the changes to the collective bargaining agreements are subject to ratification by UAW members and approval by GM's board. Details of the definitive terms of the tentative agreement aren't expected to be publicly disclosed by GM until after member ratification is complete.

People familiar with the UAW agreement said it largely mirrors concessions the UAW granted Chrysler LLC last month, including a suspension of cost-of-living allowance, bonuses and some holidays.

The union is expected to present the pactto 60,000 GM workers starting Tuesday. About one-third of those employees will lose their jobs under GM's restructuring plan.

In addition, GM said Friday it reached a non-binding understanding with the U.S. Treasury and UAW with respect to modifications to the UAW Voluntary Employees' Beneficiary Association agreement. The details of those terms won't be released until the union agrees to definitive terms, GM said.

Shares were down 17% to $1.59 in recent trading.

   -By John Kell, Dow Jones Newswires; 201-938-5285; john.kell@dowjones.com