The risk of a strike at Ford - the only one of the US-based 'Big Three' at which United Auto Workers members can legally strike - has been reduced after the union approved an indefinite contract extension with the automaker.

The current four-year UAW contract was scheduled to expire at 11:59 p.m. Wednesday (14 September) and the union could have automatically called a strike after members earlier this month approved such action.

"I can confirm that Ford and the UAW have agreed to continue bargaining past the expiration of the current contract in an effort to reach a tentative agreement that is in the best interest of both parties," Ford spokeswoman Marcey Evans told AFP.

The UAW is also negotiating new contracts with General Motors and Chrysler but is barred from calling strikes against either GM or Chrysler by the terms of the 2009 federal bailout of the two companies.

The UAW's negotiations with Ford, while ongoing, have lacked the intensity of the last several days that suggested the bargaining was moving towards a climax, AFP said.

Lewis Booth, Ford's chief financial officer, told a conference for investors in London over the weekend that he expected labour talks to extend past the deadline.

"We expect to continue to work and to continue the discussions," Booth said.

Such contract extensions are not uncommon and a deal is usually announced soon after.

AFP noted that the bargaining position of all three automakers appeared to have hardened in the face of signs of an economic slowdown and declining consumer confidence.

The three are resisting the UAW's top demand, which calls for boosting the pay of second tier workers, a move agreed, along with significant retiree and healthcare benefit concessions, during the dark days of the GM and Chrysler bankruptcies.

Unions have cited the high pay of top auto industry executives such as Ford CEO Alan Mulally in current talks to end two-tier pay at blue collar level.