The heads of the United Auto Workers and DaimlerChrysler AG’s Chrysler Group marked the opening of contract talks on Wednesday in Auburn Hills, Michigan, with smiles and a handshake that gave no hint of the profit pressures that could make the negotiations less than congenial, Associated Press (AP) reported.

AP said the UAW and Detroit’s Big Three will spend several weeks after the launch of talks on Wednesday hammering out contracts, covering wages and benefits for more than 300,000 hourly workers, to replace the current deals, negotiated in 1999, which expire on September 14.

The UAW was scheduled to begin talks with GM on Thursday in Detroit and with Ford on Friday in Dearborn, AP added.

According to AP, observers say a strike is unlikely, but talks are expected to be difficult given an industry landscape that includes increasing competition from foreign vehicle makers, unprecedented levels of profit-eroding incentives and rising health care costs.

Union leaders have said they’re confident the parties can reach an equitable agreement, but they also have made clear they’re not prepared to make concessions on health care benefits and wages, AP noted.