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.