Deal follows pattern of those accepted by Ford and GM.
September 26, 2012
by The Canadian Press
TORONTO—The Canadian Auto Workers union says it has reached a tentative agreement with Chrysler, signalling a successful end to labour negotiations at all Big Three automakers without resorting to a strike.
CAW president Ken Lewenza says the deal meets the pattern set in deals already reached with Ford and General Motors.
He says Chrysler will be better positioned in the industry as a result of the negotiations.
The union’s tone with Chrysler had changed dramatically from a week ago when Lewenza had urged the automaker to “get serious” and table a proposal that followed the pattern set with agreements at Ford and General Motors.
Industry observers have said those deals gave Chrysler little choice but to accept the framework agreement—Chrysler’s Canadian operations account for 25% of its global production, the largest of the US automakers.
The automaker had been concerned about being bound to the framework agreement established by Ford and GM that pays lump sum payments over four years in lieu of cost-of-living and wage increases.
Under the pattern deal first reached with Ford, each worker will get $2,000 a year in the second, third and fourth years of the contract to cover cost-of-living increases, plus a $3,000 ratification bonus.
Long-term care provisions have also been capped at $800 per month for new hires and the prescription drug plan has been changed to reduce costs.
New hires at Ford, GM and Chrysler will also begin their careers at $20 an hour, down from $24, and take 10 years to reach peak pay levels of $34 an hour instead of the six years it currently takes.
New employees will also receive hybrid pension plans instead of pure defined benefit plans for current employees.
In the US, new workers start at US$15.50 per hour and rise to US$19.28 per hour compared with the US$28 per hour top rate paid to existing employees.
In the United States, Chrysler workers received lower lump sum payments than Ford and GM workers.
Chrysler doesn’t want to follow the others because it presents itself as a smaller, different company.
©The Canadian Press