Negotiators held last-minute talks with US automaker Chrysler LLC Wednesday as a strike deadline by the United Auto Workers union approached.
Sources close to the negotiation said it was unclear whether an agreement could be reached before an 11:00 am (1500 GMT) strike deadline.
“There's progress being made but there's more to be done,” one source close to the negotiations said on condition of anonymity.
“I wouldn't want to handicap it,” the source told AFP.
Key issues include wages, health care and other benefits in the union contract, sources said.
The union will not necessarily walk off the job if an agreement is not reached by the deadline, as negotiations could be extended on an hourly or daily basis.
However, the United Auto Workers showed its willingness to walk off the job with a two-day strike against General Motors last month which led to a landmark agreement.
The UAW was expected to announce later Wednesday whether the GM contract has been ratified by its members. That deal is being used as a framework for negotiations with Chrysler.
A nationwide strike of more than 45,000 union workers could shutter 31 Chrysler facilities in the United States and could also lead to the closure of six plants in Canada and Mexico.
The UAW will turn its attention to Ford Motor Co. when it finishes negotiations with Chrysler.
UAW officials have been taking a hard line against Chrysler's new owners, Cerberus Capital Management, out of concern that the private equity group is not focused on the long-term interests of the company and its workers.
“The UAW member who is nearing retirement wants to know if he's going to be secure for the next 20 years,” said Harley Shaiken, a labor expert from the University of California at Berkeley.
“Cerberus is planning to turn the company over in five to seven years.”
The UAW has been pushing for Chrysler to transfer administration of retiree health care benefits over to the union to safeguard future benefits, sources close to the negotiations told AFP.
This plan was approved in the tentative agreement with General Motors — saving the company a considerable amount of money in the long run but requiring a big initial cash outlay.
Chrysler has far fewer retirees than GM and stands to save less in the long-term, however, and company officials have said Cerberus does not want to sink billions into the fund.
Chrysler bargainers are pressing the union to roll back all or part of the wage increase of one dollar per hour the company's workers have been collecting since September 2006.
The scheduled 2006 wage increase at GM and Ford Motor Company was diverted to cover rising health-care costs under special agreements the union negotiated with both companies in the face of massive losses.
The union, however, never negotiated a comparable agreement with Chrysler whose workers began collecting the raise last year.
Tom LaSorda, Chrysler vice chairman and the company's leading bargainer, has said the company is basically owed 345 million dollars in health-care concessions by the union.
“Giving up something you haven't gotten yet is one thing,” Shaiken said. “Giving up something you already have is very painful. This complicates things.”
Robert Nardelli, Chrysler's new chief executive officer, has also said he would like to sell off some of the company's assets such as an in-house trucking company and Chrysler's parts warehouses.
Chrysler last week temporarily idled production at several US plants in order to deal with weakened demand for its products.
The most serious casualty of a walkout could be the launch of its new minivan models, which are now rolling off the company's assembly lines in Windsor, Canada, and St. Louis, Missouri.
Chrysler kicked off a major advertising campaign on behalf of the new models just last week.
The success of the new minivans is critical to the future of the company, Chrysler executives have acknowledged.
