INSTANT VIEW: GM and UAW reach deal with Treasury

NEW YORK (Reuters) - The United Auto Workers said on Thursday it had reached a tentative agreement with General Motors Corp and the US Treasury. The UAW says the deal includes modifications to both the VEBA trust and to labor contracts.

The following are comments on the deal:

COMMENTS:

DAVID BITTERMAN, HURON CONSULTING GROUP, MANAGING DIRECTOR

"Sounds incremental. Is it enough to keep them out of bankruptcy? I'd be skeptical of that.

"My immediate reaction is it is constructive and may facilitate a quicker trip through bankruptcy but it doesn't alleviate them of a broken balance sheet and a lack of credit at the moment."

SCOTT PELTZ, MANAGING DIRECTOR AT FINANCIAL ACCOUNTING AND CONSULTING FIRM RSM MCGLADREY IN CHICAGO

"They've estimated that the labor cost in a GM car are about 7 percent of the total cost and one of the issues that was really burdening GM was the legacy costs of post retirees, and to the extent that those are eliminated or seriously reduced, that would make a huge difference as to the ability to restructure.

"I'm convinced that they have no choice but to file bankruptcy. To the extent that you have constituencies with whom you've made an agreement prior to filing, it makes the outcome that much easier to achieve.

"But you've got to remember the number of parties here ... Any party you can get on board is helpful but you've got so many moving parts."

DENNIS VIRAG, PRESIDENT, AUTOMOTIVE CONSULTING GROUP, ANN ARBOR, MICHIGAN

"It's a step forward for General Motors but I think the real issue is with the creditors. I don't think there was any doubt that the UAW and GM were going to come to an agreement, much like they did with Chrysler, especially with government intervention.

"The real key to success in avoiding bankruptcy is going to be agreement with the creditors. That is a much more difficult challenge, and not likely to be settled before the deadline."

PETE HASTINGS, ANALYST, MORGAN KEEGAN, MEMPHIS:

"I think it's more focused on the union rather than the bondholders. I think the bond exchange that's on the table right now is dead on arrival so unless the deal is somehow sweetened then there's no way they're going to get the 90 percent approval that they need.

"All this is just positioning in my view for the bankruptcy filing that we expect to happen in the relatively near future."

(Reporting by Tom Hals, Caroline Humer, Scott Malone and Dena Aubin; +1-646 223-6000)