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New car deliveries to dealers across the United States look like continuing as usual after the Teamsters union and distribution companies reached a contract agreement on Saturday night, 90 minutes before the midnight deadline, the Detroit News reported.

The newspaper said the five-year deal, reached after three months of tough talks, is a compromise between an industry that is in an economic slump and a union aware of an increasing tendency of vehicle makers to turn to non-union companies to deliver cars.

The Detroit News said the contract calls for wage increases of $US1.30 an hour over the five years but also imposes a two-year wage freeze. The increases do not take effect until the third year of the agreement, when drivers will receive an increase of 40 cents an hour. There is an additional 40-cents-an-hour increase in the fourth year and 50 cents in the fifth and final year, the report added.

Teamster car transporter drivers earn an average of $20.68 an hour, the Detroit News noted.

The newspaper said the deal still must be ratified by the 9,500 union members covered and ballots will be mailed to drivers after representatives of the 74 local branches review the contract and make a recommendation.

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Teamster drivers transport 14 million vehicles, or 80% of the new light vehicles sold in the United States each year, the Detroit News noted.