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announced an agreement with

General Motors

(GM) - Get General Motors Company Report

and the United Auto Workers union late Friday to expand retirement incentives to its hourly workers and adjourn courtroom hearings on its bid to end certain union agreements until August.

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The union called Delphi's decision to adjourn the hearings in its bankruptcy proceedings a "step in the right direction." The bankrupt auto parts supplier, a former subsidiary of GM, has been pushing for wage cuts for its hourly workers in order to lower costs that the union found objectionable. The conflict threatened to end in a labor strike that had the potential to cripple GM's operations.

"They still have a lot more to do here, but this is a good step that shows that everyone is at the table," says Morningstar analyst John Novak. "I don't think anybody has to worry about a strike here in the next couple of weeks."

The union said its members working for Delphi with a tenure of 10 years or more at the auto parts maker will be offered a lump-sum, cash payment of $140,000 to sever all ties with the company. Workers with less than 10 years of service will be offered $70,000, and those hired under a recent employment agreement before March 22 will be offered $40,000. GM workers, along with some Delphi workers, were offered a similar option in March.

"Ultimately, what they're trying to do here is reduce the Delphi workforce, and wherever that ends up will determine how far they can go with the wages," says Novak. "So, there's a lot of moving parts, and it looks like concessions are being made on all sides."

In addition to the buyout offers, the UAW said employees with more than 26 years of tenure and less than 27 years will be eligible for a voluntary early retirement plan, with gross monthly wages of $2,750.

Shares of GM spiked after the announcement, closing up 52 cents, or 2.1%, to $25.35.