Union negotiators in Detroit have sealed a deal worth at least $36 billion (£17.8 billion) from the board of General Motors to end the car company’s first national strike in 37 years.

Terms of the agreement – which covers health insurance, pay and pensions – will be used by the United Auto Workers (UAW) as the blueprint for talks with Ford and Chrysler, which are facing similar disruption among their workers.

General Motors has agreed to pay $36 billion into a union-controlled trust, which will be invested and used to pay health insurance for GM’s retired workers. It is also thought that GM has agreed to pay existing workers bonuses and lump-sum payments so that it can reach an agreement on the terms of new employee contracts.

Under the four-year deal, some existing workers will be offered early retirement with a $35,000 cash sum in order open the way for GM to hire new workers at much lower pay. Those who stay on will get a $3,000 bonus once the deal is ratified and an annual bonus of at least 3 per cent of salary. All new workers will be paid less. The union failed to secure any explicit guarantees about future car models being built in the US.

The UAW expects to decide today which carmaker will go next into pay negotiations. Talks with Ford and Chrysler can proceed before the GM contract is ratified, said Ron Gettelfinger, the UAW president. The union may even hold negotiations with Ford and Chrysler simultaneously, he said.

GM and the UAW reached a tentative agreement at 3am yesterday in Detroit, home of America’s car industry. In a statement, the union said that it had called off the strike and instructed members to return to work at once.

The deal has still to be ratified by a vote of the union’s 74,000 members, expected to take place at the weekend, but Mr Gettelfinger said: “We’re proud of this tentative agreement.”

GM investors were keen that the strike should not last long and hit the struggling carmaker’s sales. GM had to seek new contracts because higher labour costs in the US have put it at a disadvantage against Japanese rivals.

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