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Monday September 17, 11:56 AM GM, union talks near make-or-break point DETROIT, Sept 16 (Reuters) - Contract talks between the United Auto Workers union and General Motors Corp neared a crucial point late on Sunday, with local union officials bracing for either a deal or the declaration of a strike deadline at the top U.S. automaker. 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 slice of the U.S. market below 50 percent. "We're not leaving until we get it," a UAW international representative said in an update on negotiations on Sunday night. "We are going to stay until it happens." A UAW local official, who asked not to be named, provided access to the update on the private negotiations to Reuters. Earlier on Sunday, a union local representing workers at GM's Saturn plant in Spring Hill, Tennessee, said it had been told by UAW negotiators that the union hoped to have an "acceptable resolution" to the talks by Sunday evening. But at a GM truck plant in Arlington, Texas, UAW Local 276 President Enrique Flores Jr. said he had been told "the negotiating parties expect to either wrap up an agreement or declare an impasse at the end of today's negotiating session." He added: "We understand the issues are complex and the effects far-reaching. Solutions are certainly proving to be difficult." Any tentative contract between GM and the UAW would have to be ratified by a majority of GM's 73,000 hourly workers. The union also has the option of declaring an impasse and setting a strike deadline, or pulling back from talks with GM and shifting its negotiating target to Ford or Chrysler. After a weekend of negotiations, the clock was ticking for both sides as tens of thousands of GM factory workers prepared to report to work on Monday in the absence of a new labor contract. GM, Ford and Chrysler are seeking sweeping concessions from the UAW to close a cost gap with Toyota Motor Corp they say amounts to more than $30 per hour for the average factory worker. The UAW agreed to extend its contract with GM on an hour-to-hour basis late Friday, just as it was due to expire. While substantial progress has been made on some areas of the GM contract, major issues also remained unresolved as of late Sunday morning, a person close to the talks said. DEAL OR NO DEAL? As the UAW's strike target, GM was expected to be negotiating a contract that will be used as a pattern for the union's talks with Ford and Chrysler. The talks, which were underway at a GM building just blocks from its Detroit headquarters, have taken some unexpected turns since last week. After hitting an apparent snag in talks, the UAW singled out GM as its "strike target" on Thursday, a term it had avoided in more collegial negotiations in 2003. Rivals Ford and privately held Chrysler quickly signed contract extensions with the UAW, clearing the way for their factories to keep operating. The early stages of the labor talks focused on a complex plan to allow GM to cut billions of dollars in expenses for retiree healthcare by paying into a new UAW-aligned trust fund, according to people close to the talks. The weekend of continued negotiations between GM and the UAW was taken as a sign by analysts and many UAW workers that the two sides were nearing a deal that would avoid a strike. Wall Street analysts have been optimistic GM would clinch a deal to slash health care costs totaling $4.8 billion in 2006. GM's unfunded liability for such costs has been estimated at more than $50 billion. GM and UAW have sparred over how fully GM should be required to fund a special trust -- known as a voluntary employee beneficiary association, or VEBA -- in exchange for clearing that overhang from its balance sheet. UAW President Ron Gettelfinger has also sought job security guarantees from GM in exchange for accepting a VEBA, two people familiar with the union's stance in negotiations said. But union dissidents have vowed to fight against ratification of such a deal if presented to rank and file. Three former UAW regional officials sent an open letter to Gettelfinger late on Sunday urging him to reject a VEBA, saying such an agreement would "undo decades of hard-won healthcare benefit protections." (Additional reporting by Kevin Krolicki and Poornima Gupta)