The United Auto Workers union set a deadline of today to reach a contract deal with General Motors and threatened to send 73,000 GM factory workers on strike if no deal is reached.
A weekend of bargaining had apparently brought the two sides close to a historic cost-cutting deal for the automaker.
But in a statement posted on its website, the UAW said "due to the failure of General Motors to address job security and other mandatory issues of bargaining, the union has set a firm strike deadline" [of 3pm Irish time]".
The union said it was willing to negotiate continuously up to the deadline. Talks between GM and the union have continued for 21 straight days.
A prolonged strike would be a major setback for the car manufacturer's recovery efforts and risk disappointing investors who have sent GM shares higher in the hope of a ground-breaking labour deal.