Mumbai: General Motors Corp and the United Auto Workers Union are rushing to close a deal aimed at cutting costs, and allowing the top US automaker to save $50 billion in post-retirement health-care.

Health care liabilities add more than $1,000 to the cost of each vehicle made by General Motors. Detroit automakers want to trim these expenses to compete better with foreign rivals, but workers are reluctant to give up benefits as their medical costs skyrocket.

The UAW had set a strike deadline for 11 a.m. New York time on the 10th day since its current contract with the largest US automaker was originally due to expire.

"General Motors has failed to recognise and appreciate what our membership has contributed during the past four years,'' UAW president Ron Gettelfinger said in a statement. "In this current round of bargaining, we did everything possible to negotiate a new contract," he added.

Despite the threat of a work stoppage, and GM Chief Executive Rick Wagoner's push for a reduction in jobs and health-care costs, the UAW hasn't walked out of the talks. Neither has the UAW walked out of a GM plant since 1998.

Although negotiators, meeting for the 20th consecutive day in Detroit, stepped up the pace in a bid to complete a tentative contract, the talks remained fluid and negotiations seemed to spill into another week, sources familiar with the talks said.

GM and the UAW have agreed to the broad terms of a deal that would reduce GM's nearly $5 billion annual health-care bill, sources said. But a contract would have to be ratified by GM's 73,000 UAW-represented workers.

Sources also said of a ground-breaking deal, which would allow GM to shift responsibility for retiree health care to a new trust fund, which analysts said, could cut GM's annual costs by $3 billion in exchange for a one-off payment expected to top $30 billion.

An agreement is crucial to the three Detroit-based automakers - GM, Ford Motor Co and Chrysler LLC - which together reported losses of $15 billion last year amidst falling sales that saw their combined share of the US market slip below 50 per cent.