The U.S. Treasury, General Motors and the United Auto Workers have reached a tentative bargain on how they'll deal with changes to the current agreement in the face of the industry's problems and GM's increasingly probably bankruptcy. The details of the deal are being kept quiet until the local unions ratify, but it's expected to be a done deal by late next week.

Without the UAW deal, GM would be hamstrung in any attempts to stay out of a government-managed bankruptcy. GM may still be unable to avoid it, but with the new UAW deal meeting U.S. Treasury approval, there at least remains a chance.

"Today's announcement is a positive development in GM's effort to restructure and become a strong, viable company going forward," said an Obama administration official in a statement.

It's expected that the GM deal with the UAW will very closely resemble the deal recently made with Chrysler. That deal saw the UAW gain a 55% stake in the company even though Chrysler still owes the UAW about $4.6 billion for its retiree health care fund.

Even with this hurdle cleared, GM must still find a way to deal with bondholders that are owed $27 billion. The company's huge liabilities combined with the weak market and government mandates could yet prove too difficult to overcome without the aid of bankruptcy.