The United Auto Workers union Thursday said it was not close to a cost-cutting agreement with bankrupt auto parts maker Delphi Corp. and automaker General Motors Corp. (GM), dashing hopes of workers and investors that a deal was in the offing.

"Nothing could be further from the truth," the UAW said in a statement on its Web site. "The parties are not close to working out such an agreement.

"There are many, many, significant issues to be resolved," the UAW said. "Overall the situation has changed very little since our last meeting."

Despite the denial from UAW, GM shares were up sharply. In early trading on the New York Stock Exchange, they soared 5.88 percent, or $1.20, to $21.59.

Those gains came after several newspapers including the Wall Street Journal reported that all three parties were nearing an agreement on issues that could help Delphi cut its union staff and pay remaining workers a lower wage, while encouraging thousands of workers to take early retirement.

The UAW said the three groups had been discussing a retirement incentive program, but while those discussions had been constructive, significant issues must still be resolved.

"There is no agreement on the retirement incentive program and only time will tell if we will be successful in this regard," the UAW said.

GM, which spun off Delphi in 1999, has said it could be on the hook for as much as $12 billion in contract obligations to its former employees as Delphi demands deep pay and benefit cuts from the union.

The world's largest automaker lost $8.6 billion in 2005 due to high labor and commodities costs, loss of U.S. market share to foreign rivals and sluggish sales of sport utility vehicles.

Delphi is GM's largest supplier and a strike at the company could shut down a few plants, causing GM to burn through billions of dollars a week, analysts have said. A 1998 strike at Delphi essentially halted GM's North American operations for nearly two months.

Delphi said it would file the motions no later than March 31 if it could not reach an agreement with GM and the unions to slash U.S. wage and labor costs. The new date is firm, while prior deadlines had been flexible.