United Auto Workers President Bob King told Chrysler plant union leaders on Monday that he hoped for an agreement on a new four-year contract by Wednesday, said a source familiar with his comments.

King and General Holiefield, lead UAW negotiator in the Chrysler negotiations, told union plant leaders that they had originally hoped to have a tentative deal in place by Monday morning, the source said.

Despite intense negotiations over the weekend, the two sides did not reach an agreement, and King told the union leaders he would meet with them again Wednesday morning, when he hoped to have a tentative pact, according to the source.

As a result of Chrysler's 2009 bankruptcy and federal government bailout, the union cannot strike the company over contract terms. If there is an impasse, the two sides would go to binding arbitration, a process that could take months.

King, who said as recently as last week that he wanted to avoid arbitration, did not mention it at the Monday meeting, the source said.

A Chrysler spokeswoman would not say whether the automaker's negotiation team expected a deal by Wednesday. The UAW was not immediately available for comment.

Chrysler is driving a hard bargain with the union, sources familiar with the talks say, as the No. 3 U.S. automaker is under more pressure than General Motors Co and Ford Motor Co to keep costs in check because of its weaker financial position.

Chrysler Chief Executive Officer Sergio Marchionne has said the company should not have to take as expensive a contract as Ford and GM.

Some of the deals that we've seen being signed between Ford and GM (with the UAW) are probably, given Chrysler's own predicament ... overly generous, Marchionne said on Friday.

The UAW's talks with Chrysler began in late July, but stalled last month as the company pushed for more concessions than its Detroit rivals got.

GM's rank-and-file ratified its new four-year deal with the UAW late last month. Ford and the union announced a tentative contract on Tuesday, and the automaker's rank-and-file are voting on ratification this week.

Ford was the only one of the three Detroit automakers to avoid bankruptcy and restructuring in 2009. The UAW said that vote will be complete by about Sunday.

Ford's tentative deal with the UAW calls for each veteran hourly worker to get at least $16,000 in bonuses. The GM deal is slightly less generous, but Ford may benefit as lower-paid new workers fill new positions or replace veteran employees.

CHRYSLER AND ARBITRATION

Chrysler is seeking more freedom to hire lower-paid new workers and a less generous bonus plan than GM or Ford.

If the company cannot get the deal it wants, it can gain a lot by waiting the months it would probably take if the contract dispute goes to arbitration, said IHS Global Automotive Insight analyst Aaron Bragman.

This is the one and only opportunity Sergio Marchionne has to go for the best contract he can push for, Bragman said on Monday. For Chrysler, it really behooves them to go for it. If they have to go to arbitration, they can pay the workers under the old contract for months.

Marchionne, like King, has said he wants to reach an agreement and avoid arbitration.

The company emerged from bankruptcy with a debt load that included $7.6 billion in government loans. In May, Chrysler repaid those loans through a refinancing that helped reduce its interest payments.

Chrysler is eager to hold down its fixed costs beyond the 2015 expiration of the deal being negotiated, people involved in the talks have said.

Chrysler's contract with the UAW expired on September 14, but both sides extended the deal to October 19.

(Additional reporting by Deepa Seetharaman and Meghana Keshavan, editing by Matthew Lewis, John Wallace and Lisa Von Ahn)

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