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CAW says GM proposal on the horizon

The union cancelled a strike deadline to give Chrysler and GM more time to reach a deal, after Ford announced a new four-year plan late Monday.


September 19, 2012
by The Canadian Press

TORONTO—General Motors and Chrysler were still at the bargaining table Wednesday with the Canadian Auto Workers Union, and analysts believe the union will be victorious in achieving similar deals to the one inked with Ford.

CAW President Ken Lewenza said late afternoon that he’s optimistic the union will be able to reach agreements with GM Canada and Chrysler. On Tuesday night, he said there has been more progress at the table with GM.

“There are still a number of challenging issues to work through,” Lewenza said in a news release. “We’re not there yet, but as long as we keep making progress at the bargaining table, we will continue to negotiate.”

Chrysler would only say that talks are ongoing and had no further comment.

Canadian Ford auto workers will vote this weekend on the tentative agreement that was reached on Monday, which the union hopes to use as a framework for an agreement with the others. The CAW said results of the vote will be released on Sunday night.

The auto workers union is usually insistent that the first collective agreement reached be followed by the others in a system called “pattern bargaining,” designed to prevent one automaker from being disadvantaged by a less competitive deal than the others achieved.

“On anything core at all, the CAW will not accept any deviation from the pattern by the Ford deal,” said Tony Faria, marketing professor at the University of Windsor. “I think you can declare a winner and the winner in this contract is the CAW. They essentially gave up nothing.”

Faria said the Big Three automakers will be hiring few if any new workers in Canada at this point.

The automakers went into negotiations talking about concessions and getting Canadian labour costs down, but that isn’t happening, he said.

The average hourly wage rate for an assembly line worker CAW is $34 an hour and it’s about $6 less in the US.

And that means Canada’s auto sector could, in the long-run, be the loser in this round of bargaining.

“That cost gap stays,” he said. “I think that does not bode well for the future of investment from Ford, GM and Chrysler into Canada. It’s going to Mexico and the US for sure and it already is.”

Ford closed its St. Thomas, Ont., plant last year while investing in plants in the US.

And General Motors is shutting down its consolidated plant in Oshawa, Ont., next year, a move that will eliminate 2,000 direct jobs. Meanwhile, it is restarting production at the former Saturn assembly plant in Spring Hill, Tenn.

Industry analyst Dennis DesRosiers said the CAW won some signing bonuses—a “visible in-your-pocket contribution”—and avoided permanent two-tier wages. He believes they’ll see similar results at the others.

“It won’t be the exact agreement, but it forms the basis for getting something done at both General Motors and Chrysler,” said DesRosiers of Toronto-area DesRosiers Automotive Consultants.

DesRosiers said major investments in the auto industry are being made outside Canada and noted that Mexico has about 21% to 22% of North America’s auto production.

Meanwhile, Canada has 17% to 18% of North America’s auto production, he said.

Pradeep Kumar, who teaches at Queen’s University School of Policy Studies, said the cost for GM and Chrysler rejecting the Ford agreement will be high.

“The economy is still weak and auto sales are not as predictable as they used to be,” Kumar said from Kingston, Ont. “Settlements are looking to the future and the future is very uncertain especially in the auto industry.”

The union cancelled a Monday night strike deadline, agreeing to give Chrysler and GM negotiators more time to go over the tentative four-year deal it reached with Ford yesterday.

The Ford deal contains no base wage increases and pension plans will remain the same for existing employees. Each worker will get $2,000 a year in the second, third and fourth years to cover cost of living increases, and a $3,000 ratification bonus.

New hires will make 60% of full pay, which is reached after 10 years, up from a six-year progression scale agreed upon in the last collective agreement. New hires will also be signed up for a hybrid pension plan, rather than a defined benefit plan like current workers.

The Ford deal will give 800 laid off employees a chance to get back to work, partially through the creation of 600 new jobs at its Canadian operations. Most of the new positions will be at its Oakville, Ont. assembly plant.

The CAW has asked Chrysler and GM to continue the tradition of using the deal inked with one automaker to set a “pattern” for their own negotiations.

Lewenza said discussions with the automakers will continue around the clock.

On Monday, Lewenza told reporters that the two remaining automakers and the union were still “miles” apart. While talks were progressing Tuesday, Lewenza said he couldn’t say whether the companies and union were in any greater agreement because no new offers have been made.

However, he added that he is confident the companies understand the importance of pattern bargaining, which keeps labour and wages out of the numerous competitive pressures automakers face.

“I feel good about the discussion we had at GM and that optimism should lead to a deal,” he said. “But bargaining is fluid and at any time something could fall off the rails, but I’m feeling optimistic.”

A strike is still possible and Lewenza says the union will give 24-hours notice of a walkout if Chrysler and GM drag their feet on a deal.

©The Canadian Press