The United Auto Workers said today it has reached a tentative agreement with General Motors Corp. and federal officials to modify its labor contract with the automaker, removing a major hurdle to GM’s government-mandated restructuring. The UAW did not release details of the agreement because it has not been ratified by its members at GM. The union said it was in the process of scheduling a ratification vote. The “tentative understanding” contains modifications to the UAW’s labor deal and GM’s obligations to fund a trust to pay retiree healthcare benefits, the union said. – From LA Times

Tesla’s dream of creating affordable, all-electric cars got a high-voltage jolt Tuesday when German auto giant Daimler bought a 10 percent stake in the San Carlos company. “We’re thrilled,” said Diarmuid O’Connell, Tesla’s vice president of business development. “Daimler invented the internal combustion engine. To partner with them is the greatest endorsement you can have in this business.” – from SFgate

But the real prize is Tesla’s advanced battery technology. Tesla’s lithium-ion batteries have the best combination of power, range and safety of any scalable model currently available. Mercedes has already tested them in a limited fleet of prototypes. Now it’s expecting to roll out its first battery-powered vehicle next year and will offer battery-powered versions of all its models by 2012. The timing for all this couldn’t be better. The White House just announced its new Corporate Average Fuel Economy standards, which aim to cut emissions by 40pc in 2016. A move towards a battery-powered fleet could help Daimler move to the front of the pack. That would make its investment in Tesla much more than just a shot at glamour. – from Telegraph

“Our strategic partnership is an important step towards accelerating the worldwide commercialisation of electric vehicles,” said Thomas Weber, a Daimler board member, in a statement. Daimler recently snapped up a stake in German group Li-tec to facilitate the manufacture of the lithium-ion batteries needed for electric cars. – from AFP

The cost of the new Z4 was not announced.

President Bush on Friday announced $13.4 billion in emergency loans to prevent the collapse of General Motors and Chrysler, and another $4 billion available for the hobbled automakers in February with the entire bailout conditioned on the companies undertaking sweeping reorganizations to show that they can return to profitability. – from NYTimes

The White House announced a $17.4 billion rescue package for the troubled Detroit auto makers that allows them to avoid bankruptcy and leaves many of the big decisions for the incoming Obama administration. Speaking from the White House, President George W. Bush said the administration decided against forcing a bankruptcy to compel cost-cutting, in order to avoid the risk that consumers would desert one or more of the companies and touch off an industry collapse, deepening the current economic downturn. “In the midst of a financial crisis…allowing the U.S. auto industry to collapse is not a responsible course of action,” Mr. Bush said. – from WSJ

At the Senate auto-bailout hearings two weeks ago, bailout-celebrity Sen. Bob Corker, a Tennessee Republican, aimed his rhetorical guns at Robert Nardelli, CEO of Chrysler: Couldn’t Cerberus Capital Management, the $27 billion private-equity firm that owns 80% of Chrysler, simply bail out the auto maker itself without government funds? – from WSJ