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In exchange for a 55% reduction in cash obligations to a UAW retiree trust, GM would grant the union a 17.5% share in the company, along with $6.5 billion in preferred stock, a $2.5-billion note and warrants for an additional 2.5% of the automaker, according to union representatives who have reviewed the tentative contract.

Under the new scenario, as much as 70% of GM would fall to the government, which has lent the automaker $19.4 billion and probably would lend it several times more than that in a bankruptcy.

If approved, the agreement would in effect hand the federal government a controlling stake in one of the world's largest industrial companies.