At FCA, about 45 percent of the hourly UAW workers earn lower-tier wages.
Marchionne said the agreement sets the groundwork for Tier 2 to eventually go away. He would not say exactly how.
However, in Canada, the Detroit 3 have a process whereby entry-level workers have a systematic path or "grow in" to full pay through a series of automatic raises that kick in over time. That grow-in period for Canadian auto workers represented by Unifor is 10 years. Labor experts in the U.S. said they expect a grow-in at the Detroit 3 to be no more than eight years.
Pressure for raises
The surge in profits for the once-struggling Detroit automakers -- FCA, Ford and GM -- has also fed pressure from rank-and-file UAW members for substantial raises.
Williams had also pushed publicly for the automakers to consider a proposal to pool their respective company health plans into a single group to curb rising costs. It was not known whether FCA agreed to that proposal in any form.
As the contract expiration approached, scores of UAW-represented FCA workers were on social media, either rallying their colleagues for a strike or urging calm until official word came from bargainers in Detroit.
Word of the initial extension wasn't reported by the union or the company via social media for over 10 minutes.
Neither the union nor the company disclosed in their initial statements which issues kept bargainers from reaching an agreement before the previous pact's expiration.
Going into the negotiations, FCA was in the worst financial shape of the three Detroit automakers and least able to afford significant increases in labor costs.
However, Marchionne has said repeatedly that the two-tier wage structure put in place in 2007 -- which pays two workers doing identical work two different rates of pay depending on their hire date -- is not sustainable and unconscionable. The UAW made the elimination of the two-tier system a top bargaining priority this year.
Williams said negotiations at GM and Ford would continue this week. But he said he didn't expect any new tentative agreement with either company until at least next week.
Asked if the FCA agreement would serve as a pattern for GM and Ford, Williams said the broad issues addressed would be the same but resolving them might be slightly different given the different financial and operating circumstances each company finds itself in.
FCA is almost half comprised of Tier 2 workers, while Ford's Tier 2 percentage is about 28 percent and GM's is 20 percent.
Marchionne wanted to be the UAW target to negotiate a deal rather than let his stronger competitors, GM or Ford, possibly bargain an agreement that was too expensive for FCA.
He clearly was ready to do a deal given that a tentative agreement was reached less than 24 hours after the previous four-year agreement was extended just before midnight today.
He said the agreement reflects the unique financial circumstances of FCA while rewarding employees for the progress at that company since the recession in 2008-2009.
Likewise, FCA has honored its commitment to fund retiree health care, contributing $11 billion in cash to fund the Voluntary Employee Beneficiary Association that provides care to tens of thousands of hourly retirees.
Neither Williams nor Marchionne discussed whether the agreement calls for net new jobs to be created over the term of the agreement nor whether it details product commitments for specific FCA plants.
However, typically those are included as a sweetener to gain rank-and-file approval. Several FCA plants are in play.
FCA's apparent decision to move the Jeep Cherokee from Toledo, Ohio, and Marchionne's recent comment about bringing trucks back to the U.S. from Mexico could set off a chain of product movement.
The Cherokee shares a platform with the Dodge Dart, assembled in Belvidere, Ill., and the Chrysler 200, built in Sterling Heights, Mich. Either of those plants could build the Cherokee within a short time using existing lines and tooling.
According to the automaker's May 2014 future product plan, several new vehicles from FCA's U.S. brands will need to find assembly homes, including the Chrysler 100, a Dodge subcompact hatchback, a single replacement for the Jeep Compass and Patriot, the Jeep Grand Wagoneer and two Chrysler crossovers, one midsize and one full-size.
Reuters contributed to this report.