The Detroit Free Press and The Detroit News report on Friday that the default is part of the deal GM signed with the Bush administration last month to get US$13.4 billion (S$18.33 billion) in loans. The Detroit News reports Chrysler's loan deal has a similar provision.

The United Auto Workers isn't a party to the deal and hasn't threatened a strike.

The Free Press says if GM defaults on its loans, the US.

Treasury Department could demand remand repayment and force GM into bankruptcy.

The UAW and the automakers have a Feb 17 deadline for concessions to lower labor costs. -- AP