General Motors Corp said that it borrowed another USD 4 billion from the US Treasury and won a cost cutting deal from Canadian auto workers as a showdown with bondholders set the stage for a bankruptcy filing by the end of the month.

The latest emergency funds extended by the Obama administration take the total government funding to keep GM afloat since the start of the year to USD 19.4 billion.

GM said it expected that total to rise to USD 27 billion after June 1, a government imposed deadline for the embattled automaker to achieve a sweeping restructuring analysts say will require bankruptcy to complete.

The tentative agreement with the Canadian Auto Workers union, if ratified would reduce hourly compensation costs by about 28% after including a round of concessions the union agreed to give in March.

A day earlier, GM won similar concessions from the United Auto Workers to reduce operating costs and pay the union in stock instead of cash to fund a retiree healthcare trust.

Along with plans to drop dealers and unprofitable brands like Hummer, Saturn, Pontiac, Saab and Opel, the pair of labor deals would help clear the way for GM to enter bankruptcy protection with the backing of the Obama administration.

Mr Ken Lewenza president of CAW at a Toronto news conference to announce the union's tentative contract agreement with GM said that "All of our discussions that we had, it's very likely that they will go into Chapter 11.”

He added that in Europe, GM also appeared to be nearing a resolution of its long-running effort to find a buyer for its Opel unit.

GM faces a June 1 deadline to restructure its debt and operations and has said it could file for bankruptcy if it fails to get bondholders to agree to forgive some USD 24 billion or 90% of the amount they are owed.

(Sourced from sify.com)