UPDATE: CAW wants to share in automakers’ rising profits
We won’t be overzealous.” — CAW president Ken Lewenza.
Canadian Auto Workers
Detroit big three
TORONTO: The Canadian Auto Workers said it doesn’t expect to regain all of the concessions it made when automakers were struggling during the recession, but it wants to share in the profits now that the industry has rebounded.
“We won’t be overzealous,” CAW national president Ken Lewenza said Aug. 14 as the union kicked off contract negotiations with the three big North American automakers.
“We aren’t going in there demanding everything back from 2009. We’re just saying that we have to find a way to share in the successes that our members have built over many years.”
The union met with General Motors Canada and with Chrysler Canada in the afternoon. It will meet with Ford Canada on Aug. 15. Contracts for workers at all three companies expire Sept. 17.
The union made a number of concessions, including to wages, vacation time and cost-of-living payments, to help the ailing automakers during the 2008-9 recession.
While the CAW doesn’t expect to regain all of those cuts, Lewenza says it’s hoping to make some progress now that the companies are making a profit.
“GM and Ford are earning record profit margins on their North American business and Chrysler’s have come back to profitability far faster than anyone dared to hope for in 2009,” said Lewenza.
“The companies have learned to make money even at low volumes. Workers’ sacrifices have been a big part of that success.”
But a Chrysler Canada spokesman warned Tuesday that although the company has returned to profitability, it is not out of the woods.
“While the industry and Chrysler have demonstrated some improvements to date, those gains have been modest and it is critical that we not return to an uncompetitive situation,” said Todd Bested, Chrysler Canada’s director of labour relations.
Lewenza said the talks with GM were “frank and honest,” but the two parties were still “miles apart.”
The CAW wants automakers to invest in their Canadian factories and modernize the plants, as a means of boosting job security.
Lewenza said GM told the union it was looking for a sustainable wage package and talked about reducing hourly compensation, without providing details.
He said that although the union is willing to make some concessions around how long it will take for new hires to reach the top of the pay scale, the union will not accept a two-tiered wage system.
Lewenza also said the automakers have been “very aggressive” during meetings and have emphasized how the higher loonie is increasing production costs and leaving Canadian plants at a disadvantage compared those in the US.
In a statement, GM said it was optimistic that it will be able to reach a deal.
“The North American auto industry today faces extremely challenging competitive conditions and there is no finish line for improving our products, our processes and building the company we want for the future,” the company said in a statement.
“Achieving a competitive agreement with our CAW labour partners is one important element of many as we continue moving forward.”
A report from Scotiabank showed North American auto sales posted a double-digit increase in the first six months of 2012, making it the best year so far since 2007.
The gains reflected a worldwide surge in buying – with the exception of Western Europe – that has seen global auto sales post a 6% increase so far this year.
“We expect continued gains in the second half supported by record low short and long-term interest rates in most nations, the recent acceleration in the pace of automotive lending across the globe and solid job creation in emerging markets,” said Carlos Gomes, senior economist and auto industry specialist at Scotiabank.
However, Gomes has said that keeping costs under control will top the companies’ agendas, particularly because changes to how workers’ health care is covered have made production at Canadian plants more expensive than in the US.
“The reality is that Canada’s auto sector has an overall cost structure that’s higher than what we were seeing in the United States,” he said.
“So from (the automakers’) perspective, it’s important to not widen the gap at all, in terms of providing Canada with an additional disadvantage.”
Lewenza countered that argument by saying more auto assembly plants have been closed in Canada than in all of Europe.
“Every one of these companies is making a strong profit in North America and every one is losing billions in Europe,” Lewenza said.
“We’ve taken more than our share of hardship and adjustments.”
Ontario has seen the Detroit Three carmakers – GM, Ford and Chrysler – cut thousands of jobs in the last decade as their parent companies restructured in the US.
In July, GM has said it would invest $850 million in research and development in Oshawa, Ont., however the company is also going ahead with a plan to close its consolidated plant, a move that will eliminate 2,000 jobs.
The closure follows the shut down of a GM truck plant in Oshawa and a transmission factory in Windsor, Ont.
During the financial crisis, the federal and Ontario governments helped bailout Chrysler and GM with a rescue package that totalled about $13 billion – with the majority, $10.5 billion, going to GM.
The CAW represents approximately 4,500 workers at Ford, 8,000 workers at General Motors and another 8,000 at Chrysler.
© 2012 The Canadian Press