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Ford Motor Co. (F) said Monday that it had reached a tentative deal over unionized retiree health benefits Monday, increasing the chances that General Motors Corp. (GM) and Chrysler LLC can secure their own concessions.

United Auto Workers President Ron Gettelfinger announced the revised pact following other changes to work rules reached with the three Detroit auto makers last week.

Ford, which faces $13.6 billion in legacy health costs, said up to half of its future payments to a retiree fund could be made in stock rather than cash under the terms of the pact.

The proposed terms mirror those contained in the federal loan guarantees extended to GM and Chrysler, which the auto makers have to meet by March 31. Ford has not sought U.S. government aid.

All three U.S. automakers reached deals in 2007 to transfer legacy health costs into trust funds known as Voluntary Employee Beneficiary Associations, or Vebas, which they have funded with cash.

The liquidity drain from the payments has weakened their competitive position versus overseas automakers, and provided a key focus for the restructuring efforts at GM and Chrysler.

"We will consider each payment when it is due and use our discretion in determining whether cash or stock makes sense at the time, balancing our liquidity needs and preserving shareholder value," said Ford in a statement.

Ford shares rose more than 20% at one point, and were recently up 13.3% at $1.79. GM shares were up 5.1% at $1.86. GM and Chrysler were not immediately available for comment.

Renegotiating the healthcare obligations due to UAW members and their spouses is a key part of the restructuring plans presented by GM and Chrysler to the U.S. government last week as part of survival strategies aimed at keeping both out of bankruptcy protection.

The pact will likely set a benchmark for ongoing talks with GM - which owes $20 billion to its Veba - and Chrysler. The UAW will provide further details on the Ford plan to local leaders this week. It is also subject to member and court approval.

GM bondholders will be scrutinizing any deal reached with the UAW after some complained last week that they were being asked for an overly large sacrifice.

-By Jeff Bennett, Dow Jones Newswires; 248-204-5532; jeff.bennett@dowjones.com