US car makers face tough times

As of early Tuesday, General Motors was the only leading car maker yet to reach an agreement with the union.

Labour contracts covering 302,000 salaried workers and 485,000 retired workers had expired on Sunday.

The car manufacturers, battling against adverse market conditions and growing competition from abroad, have been have holding out for concessions from the unions.

Chrysler lost its top three spot in terms of sales in August to Toyota, while the share of the US car market controlled by the country's 'Big Three' carmakers slipped to an all-time low of 57.9%.

Details of the new four-year contracts which stipulate wages, jobs, health care and pensions will not be published until they are ratified by the UAW.

But analysts say compromises on wage and pension rises are likely.

Cutbacks

As UAW President Ron Gettelfinger had insisted the union would not retreat on health care benefits, it is thought the agreement will give automakers flexibility over plant closures in exchange for continued low-cost medical coverage.

Sources familiar with the Chrysler deal said it would allow the automaker to close seven poorly performing US auto parts plants over the next four years, a move that could lead to more than 9,000 job losses, the Reuters news agency reported.

The UAW in return obtained a $3,000 so-called "signing bonus" for its rank and file members at Chrysler, and unspecified wage increases over the first three years of the contract, the sources told the agency.

General Motors and UAW officials were optimistic that a deal would be reached.

"We're going to hammer away at the negotiations process until we reach agreement. Obviously in this business it's pretty hard to predict timing," said Mr Gettelfinger.