The United Auto Workers union could become General Motors’ biggest shareholder under a deal to transfer the carmaker’s healthcare obligations to a huge union-managed trust.

The two sides agreed last week to set up the Voluntary Employees’ Beneficiary Association as part of a four-year labour contract. GM’s $29.9bn contribution to the Veba will include a $4.4bn note convertible into GM shares. GM’s market value of almost $21bn plus that of the bond, if converted at par, would give UAW a stake of about 17 per cent.