Negotiating teams from the United Auto Workers union met into the night Monday with General Motors Co and Chrysler Group LLC but face the prospect of extending current contracts that expire Wednesday night.
Chrysler Chief Executive Sergio Marchionne said the automaker and the UAW are not close to a deal but continue to target Wednesday night for completion of a tentative pact.
"The negotiations are not concluded and I don't have a contract yet. We are not close," Marchionne told reporters at an auto show in Frankfurt.
Parallel talks between the UAW and GM and Chrysler in Detroit are expected to continue into the night Tuesday. Talks at Ford Motor Co also continue, but lag behind those at GM and Chrysler, sources familiar with the talks said.
GM and Chrysler are working to narrow the gap on issues including the size of signing bonuses for workers once a new contract is ratified, the sources said.
Representatives of the GM and Chrysler councils from local bargaining units have not yet been summoned to Detroit to review proposed contract terms, which must occur before a deal is presented to workers.
That process typically takes a day, which suggests GM and Chrysler are running out of time to clear a deal by the deadline just before midnight on Wednesday.
If the deadline is not met, the union and the company teams would have to agree to extend the current contracts, which is seen as a routine matter, labor analysts said.
GM is seen as the "lead" company that the UAW expects to complete talks with first.
The talks are being watched by investors as an indication of how much Detroit has changed since the steep downturn and sharply tighter financing that almost forced GM and Chrysler out of business in late 2008.
GM has about 49,000 UAW-represented workers, Ford has about 41,000, and Chrysler has about 23,150.
SIGNING BONUSES KEY ISSUE
GM started with a proposal for signing bonuses of around $3,500 per worker, equal to a cost of about $171 million for the automaker, the sources said. That proposed figure is based on amounts paid by other industrial companies such as Deere & Co and Caterpillar Inc in recent settlements with the UAW.
Analysts have said signing bonuses will likely be between $5,000 and $7,500 per worker.
GM's willingness to consider even higher bonuses hinges on the its ability to win concessions in other areas that would offset the higher up-front costs, other sources have said.
Chrysler has indicated that its signing bonuses should be lower than those paid to workers at the more profitable GM, a person close to the talks said.
GM, which emerged from a bankruptcy financed by the U.S. Treasury in 2009, has been unwilling to add costs in the form of higher base wages that could widen its cost gap with rivals led by Toyota Motor Corp or hurt it in a renewed downturn.
The current four-year contract at Ford is likely to be extended once deals with GM and Chrysler are reached, representatives of both sides in the talks have said.
Ford workers may get higher one-time payments than their GM and Chrysler counterparts if Ford and the union roll separate, pending grievances into a contract settlement. Ford workers have authorized a strike in local votes.
GM and Chrysler workers are barred from striking under the terms of the 2009 bankruptcies brokered by the Obama administration. If the contract talks fail, binding arbitration would result.
Chrysler is managed and majority-owned by Italy's Fiat SpA.
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