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Negotiators for General Motors Corp. and the United Auto Workers, trying to craft a new contract, are still discussing the automaker's proposal to pay the union to form a trust and take over the company's huge retiree health care obligation, according to two people who have been briefed on the talks.

The people, who spoke on condition of anonymity because the talks are private, said noneconomic issues, which include grievance procedures, absenteeism and other items, had been settled.

The discussions about the trust took place even though UAW president Ron Gettelfinger on Tuesday rejected a GM offer on the trust, called a Voluntary Employees Beneficiary Association, or VEBA, according to one of the people briefed on the talks.

``I can tell you it's being worked on,'' the person said Thursday.

GM, which has been picked by the union as the lead company and potential strike target in this year's bargaining, badly wants the UAW to agree to the trust. Whatever agreement is reached with GM likely would be used as a pattern for the other two Detroit automakers, Ford Motor Co. and Chrysler LLC.