Lee Henderson, left, Alvarado, Texas, directs an instrument panel into a vehicle in this Feb. 19 file photo at the General Motors Assembly Plant in Arlington, Texas. The United Auto Workers union on Thursday announced it has reached a tentative deal with the government and General Motors Corp.

Detroit ? The United Auto Workers struck a deal with General Motors and the federal government Thursday to cut labor costs, close factories and change the way retiree health care is funded.

The agreement could ease one of GM’s biggest problems: The cost of its work force. But the automaker is still struggling with a crushing debt that may drive it into a Chapter 11 bankruptcy reorganization.

The deal is “the best news for everybody involved,” said Harlan Platt, a professor at Northeastern University in Boston who teaches corporate turnarounds.

“This is great for the workers because some of their jobs will be there in the future. This is great news for the Obama administration because they’ve demonstrated they’re respecting contracts.”

Restructuring ahead

General Motors Corp., which has received $15.4 billion in federal loans, faces a government-imposed June 1 deadline to finish a major restructuring or be forced into bankruptcy protection.

The government has told the automaker to cut labor costs, close factories, shed dealers and brands, and persuade at least 90 percent of its bondholders to sign on for the stock-for-debt exchange.

But thousands of bondholders are expected to shun the company’s offer to take 10 percent of its stock to wipe out $27 billion in unsecured debt.

Platt said the UAW deal could be the catalyst for more bondholders to accept GM’s offer.

GM shares rose more than 32 percent to $1.92 on Thursday — an increase that Platt says indicates that investors see value in the company. Platt believes the stock could climb to around $4 because GM will be able to restructure out of court, emerging with far less debt, lower costs, fewer brands and factories, and a rejuvenated vehicle lineup.

GM has offered bondholders 225 shares for every $1,000 of debt.

“If you’re getting 225 per $1,000 and the stock goes to $4, which I think it will, you’re getting all your money back,” he said. “This is going to be significantly more than they will get in a bankruptcy.”

But Douglas Baird, a University of Chicago law professor who specializes in bankruptcy cases, said the bondholder obstacle is nearly insurmountable.

“There’s a collective action problem,” he said. “There are a lot of these bondholders. Even if there are a lot of them on board, that’s not the same as 90 percent on board.”

Still, the UAW deal could help shorten the length of time GM stays in bankruptcy protection, Baird said, making it easier for the court to concentrate on remaining matters such as the bond debt.

Future clarifications

The UAW was withholding details about the agreement until plant-level union officials were briefed. The union summoned local officials to Detroit on Tuesday for the explanation, and local union leaders expected voting by the membership to end late next week.

The UAW statement announcing the deal did not mention factory closures or production of vehicles outside the U.S. — issues that the union has protested in Detroit and Washington. But a person briefed on the agreement said it includes an agreement on the factories. The person requested anonymity because union members have not been briefed.

GM had planned to close 16 factories, laying off 21,000 hourly workers. Of the 16 facilities, two have been announced previously: an engine plant in Massena, N.Y., and a parts stamping plant near Grand Rapids, Mich.

On Thursday, union leaders at the company’s Spring Hill, Tenn., assembly plant warned 2,400 hourly workers in an e-mail that they believe the factory will be closed by the end of this year.

The company has said it will also offer more buyout and early retirement packages. GM has about 61,000 hourly workers in the U.S. but plans to take that number down to 40,000 by 2010.

The Obama administration welcomed the agreement, saying it is a positive development.

A spokesman for a committee of GM’s bondholders had no immediate comment on the union agreement.