The United Auto Workers union announced Thursday it has reached a tentative deal with the government and General Motors Corp. that will cut labour costs and fund a union-run trust that will take over retiree health care costs next year. (Tony Gutierrez/File/Associated Press)

The United Auto Workers union has worked out a tentative deal with General Motors Corp. and the U.S. government, a deal that includes labour concessions.

The concessions were a key stepping stone to GM securing financing from the U.S. government.

Unionized workers must still approve the new deal, which includes changes to a union-run retiree health-care trust, the UAW said.

The Canadian Auto Workers union is deep in similar negotiations with GM Canada and government officials.

An original deadline of May 15 for the union and GM Canada has come and gone, with Industry Minister Tony Clement now saying a deal has to be in place by May 31.

June 1 is the deadline for GM to have its restructuring plan in place.

On May 20, GM Canada said about 40 per cent of its 709 dealerships would be cut, with about 245 outlets notified that day their contract would not be renewed beyond October 2010.

Last week, GM started informing about 1,100 of its U.S. dealerships that they were being dropped.