Stricken carmaker Chrysler has secured a tentative deal with its biggest union just days before a US government deadline to complete restructuring and avoid liquidation.
The agreement with the United Auto Workers (UAW) union on concessions will help Chrysler move closer to finalising an alliance with Italy's Fiat Group that is vital for its survival.
The Obama administration had rejected a restructuring plan from Chrysler in February and had given it until the end of April to conclude negotiations with unions and debt-holders and complete the partnership with Fiat.
White House economic adviser Larry Summers said the Obama administration is hoping the carmaker will avert bankruptcy.
The UAW said the concessions made in the provisional agreement were "painful" but it gave Chrysler and its workers a second chance.
Chrysler's vice-president of labour relations, Al Iacobelli, said in a statement: "The provisional agreement provides the framework needed to ensure manufacturing competitiveness and helps to meet the guidelines set forth by the US Treasury Department.
"As a result, Chrysler LLC can continue to pursue a partnership with Fiat SpA."
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