GM's new models are competing in a crowded market

The deal, which sets out pay and conditions for GM workers for the next four years, follows similar agreements between the union and GM's biggest rivals, Ford and DaimlerChrysler, earlier this week.

GM chairman and chief executive Rick Wagoner said the accord would "allow us to work together to address what is clearly a challenging set of competitors".

There was no word on the details of the GM deal, but UAW's agreements with Ford and DaimlerChrysler are said to include a $3,000 (�1,800) signing bonus, and wage increases of between two and three percent in the third and fourth years of employment.

Under pressure

When the DaimlerChrysler deal was announced on Monday, UAW president Ron Gettelfinger said it would serve as a benchmark for the others.

The latest round of pay negotiations came at a difficult time for the 'Big Three' US carmakers, who are struggling in the face of adverse market conditions and increasing overseas competition.

Chrysler lost its top three spot in terms of sales in August to Toyota, while the share of the US car market controlled by the country's Big Three slipped to an all-time low of 57.9%.

During the pay talks, some of the car companies are likely to have held out for money-saving compromises on wage and pension increases, and may also have pushed for greater flexibility in pushing through plant closures.

The negotiations were more protracted than usual, with the GM deal coming more than three days after UAW members' original contracts had expired.