For investors watching the labor negotiations unfold at Detroit's Big Three automakers, the best is likely being saved for last.

Chrysler said Monday that the United Auto Workers union has set a deadline of 11 a.m. EDT Wednesday for the two sides to reach an agreement on a new labor contract. If the negotiations at General Motors ( GM) are any guide, that means a nationwide labor strike could loom as the parties work toward a deal.

It also means talks at Ford ( F) have been pushed to the back burner -- putting it in a position to score the most points in Detroit's bid to pare down the U.S. auto industry's bloated cost structure.

"Anything the UAW gives to one company in the beginning will make it easier for the other companies to get later on," says David Cole, the chairman of the Center for Automotive Research.

Ford spokeswoman Marcy Evans declined to comment. A spokesman for the UAW could not be reached.

Shares of GM have jumped 23% since the beginning of September as investors bid up the stock even in the face of a two-day strike, certain of the favorable outcome for the company that promptly emerged. In comparison, shares of Ford have climbed just 6% in that time, giving it more room to run if it ultimately reaches a deal as good as, or better than, GM's.

Late last month, GM reached a tentative agreement, expected to be ratified by the union on Wednesday, to set up a union-controlled health care trust fund, or VEBA. It also established a two-tier wage structure, allowing the company to pay new hires at a lower rate that is more comparable to its foreign-based competitors.

The VEBA will be expensive for GM in the near term as the it shells out cash to finance the fund, but in the long run, it promises to free the company from the crushing burden of its health care payments to retirees. That will lower GM's borrowing costs and boost the profitability of its auto operations, allowing the company more leeway to invest in new products and become a more formidable competitor.

Gimme Credit analyst Shelly Lombard estimates that GM's annual savings as a result of the deal could amount to $3 billion.

Ford undoubtedly needs similarly big concessions from the UAW. The company has long been considered Detroit's laggard in the U.S. auto industry's efforts to revive itself. It was well behind GM in adopting a sweeping restructuring plan aimed at reducing its footprint in North America to match its shrinking market share.

In 2006, Ford lost $12.6 billion, the worst performance in its 103-year history. It has mortgaged most of its assets to finance its restructuring, and while GM has shown an uptick in U.S. sales in recent months, Ford's have continued to decline.

But while Ford may be Detroit's weakest link, its stock is cheap and it's in the best position to win cost concessions from the UAW, which needs all of Detroit's Big Three to survive and be profitable.

For its part, Chrysler remains a wild card. Its business is also quickly deteriorating, but it's now owned by a deep-pocketed private-equity firm that has pledged to invest in the company with a long-term mindset.

Cerberus Capital Management, which paid $7.4 billion for an 80.1% stake in Chrysler, needs a good labor deal in order to attract international auto players into a partnership that can achieve global economies of scale for the company -- the only Big Three automaker that operates solely in North America.

When it was sheltered by its former German owner, Daimler ( DAI), Chrysler was excluded from previous health care concessions made by the UAW at GM and Ford, so the company is already coming from behind in this round of negotiations.

" The lack of a deal is costing them roughly $600 a vehicle," says Cole. "No overseas players are going to consider partnering with Chrysler until they get the situation squared away with labor. If they don't have economies of scale, they're going to be at a serious disadvantage, so these negotiations are crucial for Cerberus in terms of getting a return on its investment."

A strike at privately held Chrysler will have no consequences for the stock market, and the company is much smaller than GM and Ford, so it wouldn't cause the same level of disruption in the broader auto industry as the GM strike did.

For those reasons, the UAW may have more leverage in this standoff, but Cerberus has hired former Home Depot ( HD) CEO Bob Nardelli to lead the company. He's known as a hard-nosed negotiator who will push to get everything he wants.

"We've been working through the weekend, and we're making progress," says Chrysler spokesman Mike Aberlich about the UAW talks.

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