The United Auto Workers union set a Monday morning deadline for reaching a contract deal with General Motors Corp. and threatened to send 73,000 GM factory workers on strike if no deal is reached.

The strike deadline raised the stakes in the closely watched labor talks after a weekend of marathon bargaining that had appeared to bring the two sides close on a historic cost-cutting deal for the top U.S. automaker.

Chris Tiny Sherwood, president of UAW Local 652 in Lansing, Michigan, said the union's leadership had told him to be prepared to send workers out on picket lines at 11 a.m. (1500 GMT) on Monday unless a deal is reached in the meantime.

They told me to walk them at 11 a.m. unless I hear otherwise, said Sherwood, whose local represents more than 1,500 GM workers who make three Cadillac models.

Both sides continued to talk in Detroit as of early Monday morning, extending a bargaining session that began on Sunday morning. Talks have continued for 21 straight days.

We are fully committed to working with the UAW to develop solutions together, GM spokesman Dan Flores said. We will continue focusing our efforts to reach an agreement as soon as possible.

GM and UAW negotiators had agreed during the weekend to the broad terms of a deal that would reduce GM's nearly $5 billion annual health-care bill, people briefed on the talks said.

Under that plan, widely considered the central issue in the complex talks, GM would shift responsibility for retiree health care to a new UAW-aligned trust fund.

Wall Street analysts have said such a step could cut GM's annual costs by $3 billion in exchange for a one-off payment expected to top $30 billion.

Other key issues in the talks include GM's desire to hire new workers at a lower wage rate and the union's request that the automaker commit to maintaining production in the United States over the duration of the coming contract.


The outcome of the contract talks is seen as crucial to efforts by the three Detroit-based automakers -- GM, Ford Motor Co and Chrysler LLC -- to recover from combined losses of $15 billion last year and sales difficulties that have driven their share of the U.S. market below 50 percent.

UAW spokesman Roger Kerson declined comment on the union's imposition of a strike deadline. The union's previous contract expired September 14.

GM, Ford and Chrysler are seeking concessions from the UAW to close a labor cost gap with Toyota Motor Corp and other Japanese automakers operating in the United States that they say amounts to more than $30 per hour for the average factory worker.

Most analysts have seen a strike as a remote risk because of the weakened position of GM, which has cut 34,000 blue-collar workers from its payrolls and announced plans to shutter a dozen factories by next year.

The last UAW strike against GM was in 1998. That walkout at two GM parts plants in Flint, Michigan shut down GM production and caused its sales to plummet.

GM's market share never recovered and the automaker responded to the work stoppage by overhauling its labor relations department. GM's U.S. market share had been 31 percent before the strike, but fell to 24 percent last year.

If a tentative contract is reached, it would have to be ratified by a majority of GM UAW-represented workers.