The midnight deadline for the Canadian Auto Workers' union and GM Canada to reach a labour concession deal has passed without word that a new agreement has been reached.

Shannon Devine, a spokesperson for the CAW, told CTV.ca late Friday night that the union did not expect to strike a deal but that "we're going to continue talking until we reach an agreement."

Devine had said the union committee that would vote on a potential agreement is meeting at 9 a.m. Saturday, but it appears they do not have a deal to vote on.

She said no announcement of a potential agreement could take place before the committee meets.

CAW president Ken Lewenza says his union is locked in the most difficult bargaining process ever as it struggles to reach a cost-cutting deal with GM Canada by midnight.

"This is the third time we've been in bargaining with General Motors in the last 12 months," he told CTV Newsnet on Friday.

The union has offered the Chrysler deal, which resulted in a total compensation cut of $19 per hour or about 25 per cent, but the company "continues to be overzealous," he claimed.

"They say the Chrysler deal doesn't meet their needs."

The Chrysler deal protected base wages for workers, but benefits took a hit.

Lewenza said his union is trying to reach a deal that "minimizes the pain" for its membership while earning the support of the federal and Ontario governments.

A GM Canada spokesman would only say there is "lots of hard work going on."

Prime Minister Stephen Harper said further government help is contingent on a "viable, sustainable" company emerging.

"I don't think we relish this kind of participation in a private-sector company," he told reporters Friday at a Toronto news conference held to make a public transit funding announcement.

"But as we have said, if all of the stakeholders in General Motors are prepared to do the things necessary to ensure the long-run viability of the company, we are prepared to work together in concert with the government of the United States to make sure that we preserve our share of auto production in this country."

Harper sidestepped the question of whether Ottawa would help Queen's Park cover a $7-billion pension liability if negotiations fail and GM Canada goes under.

Ontario's Premier Dalton McGuinty said in the case of Chrysler, "each (stakeholder) decided they had to give something in order to save the whole.

"And we're convinced that with goodwill and determination, we can arrive at a solution here," he said.

McGuinty repeated his government's line that the best way to protect GM pensioners is to "ensure that GM is viable going forward."

If no agreement is reached, both the federal and Ontario government will cut off financial support. In the words of CAW Union President Ken Lewenza, GM Canada will be "liquidated."

Lewenza said the union is "not even close" to a deal as of early Friday afternoon.

The pension issue

GM and the union reached an agreement in March that reduced total labour compensation costs by $7 per hour or about 10 per cent. Lewenza claimed that the union made a $500-million sacrifice in the areas of retirement and health benefits.

But the federal and provincial government said it didn't cut labour costs enough, and ordered the two sides back to the bargaining table.

The prospect of GM Canada's "liquidation" would be daunting, considering how integrated the Canadian wing is with the parent company.

The main sticking point in negotiations is pensions, both present and future.

Analyst Richard Cooper, of JD Power Associates Canada, says the unions and GM have a "tough road ahead" on the pension issue.

"The issue for General Motors is that so many of the people who are dependant on them are not active workers anymore. It's those legacy costs," Cooper told CTV's Canada AM.

On Thursday, a group of retired GM workers staged a sit-in at the office of Ontario Finance Minister Dwight Duncan, demanding more pension protection. The minister told the pensioners in Windsor on Friday that their concerns are valid.

Duncan said he plans to bring in legislation in the fall to address the issue of provincial backup for at-risk private pensions.

All this is happening amid the backdrop of Thursday's closing of GM's truck plant in Oshawa, Ont. The last pickup truck rolled off the assembly line, and the workers sent home.

The plant had been in operation since 1965, and produced 10 million vehicles.

"General Motors chose to close the most productive, high-quality plant in the world, and that's a decision we opposed," Lewenza said, noting the CAW protests of last year.

Thursday was a painful day for his members, "but for the next few hours, we've got to concentrate on what we've got left," he said.

Meanwhile, south of the border, GM told 1,100 U.S. owners that their franchise agreements will not be renewed.

In Canada, GM will reduce its dealerships to something between 395 and 425 by the end of 2010. There are currently 705 dealerships. An estimated 12,000 jobs will be affected.

This comes a day after Chrysler dropped 789 of its dealers.

With files from The Canadian Press and The Associated Press