FCA's Sergio Marchionne and UAW's Dennis Williams shared a laugh during the opening of contract talks earlier this summer.

The United Auto Workers and FCA U.S. fell short in their bid to reach a new labor contract as the old pact expired at midnight on Monday night, but the two sides agreed to an “hour by hour” extension, which suggested negotiators believed they were relatively close to reaching a tentative four-year agreement.

Sergio Marchionne, the Fiat Automobiles NV. chief executive officer, was in Auburn Hills   as the deadline approached, rather than in Germany for the influential Frankfurt Auto Show. Besides skipping Fiat Chrysler’s various product introductions, Marchionne had been scheduled to meet with investors and analyst as part of the ongoing   effort to bolster the company’s image and stock price.

The FCA CEO said he would have had a chance to promote his new pet project – a merger with General Motors.

The extended contract covers some 36,600 hourly workers at plants across the U.S., as well as 3,400 salaried employees who primarily work at the FCA U.S. technical center in Auburn Hill, Michigan.

Kristen Dziczek of the Center for Automotive Research in Ann Arbor, Mi. said the fact that Marchionne decided to skip the Frankfurt Auto Show as well as an important meeting with financial analysts underscores the importance of the negotiations with the UAW.

“It sends the message he thinks he can really get something done,” she added.

She also discounted the possibility of a strike against any of the FCA U.S. plants around the U.S.. “Dennis Williams has said he would consider a strike a failure and it would be a failure of the collective bargaining process,” Dziczek said.

Still, the two sides are struggling to reach a settlement on several critical issues, including a formula for eliminating the two-tier wage system that now prevails at FCA U.S., as well as at cross-town rivals Ford and General Motors. Also high on the list are revisions in health care coverage and placement of future products to protect U.S. jobs.

The union is also thought to be looking for a revision of the profit-sharing formula, which is not as generous at FCA as at General Motors or Ford Motor Co. The average UAW worker at FCA has received $9,000 in profit-sharing, before taxes, over the last four years, compared to $30,200 for their counterparts at Ford and $30,250 at GM.

Norwood Jewel, the head of the union Chrysler Department, sounded an optimistic note in a message circulated to union members and retirees as bargainers pushed past the original deadline.

“It is our goal to structure a new agreement for your approval. I would also like to acknowledge you for your leadership and ability to reach a local agreement during this process,” Jewell said, noting that some union locals were still having trouble reaching plant-level contract agreements.

Jewell added, “We will be in communication with you as to what our next steps will be. Hopefully, it will be to advise you of when and where our informational meeting will be held.”

General Motors and Ford also have agreed indefinite extensions to their labor pacts with the UAW. The extensions don’t have any time limits on them. It has been tradition for the union to focus on one manufacturer to come up with a contract that can then serve as a pattern for agreements with the other manufacturers.

“We will continue working with our UAW partners on issues we can resolve before they turn their focus to GM.  We remain committed to obtaining an agreement that benefits employees and strengthens GM’s long-term competitiveness,” GM said in a statement issued as the contract deadline approached.

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