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Canadian Auto Workers bring Ford deal to GM, Chrysler

This news story was published on September 18, 2012.
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By Brent Snavely, Detroit Free Press –

DETROIT — After reaching agreement with Ford on Monday afternoon, the Canadian Auto Workers union remained far apart with General Motors and Chrysler before a midnight deadline.

The CAW reached a tentative, four-year agreement with Ford late Monday afternoon. The union took that deal to Chrysler and GM.

“If any one of the companies just says the pattern is purely unacceptable, then we will have no choice but to withdraw our labor,” CAW President Ken Lewenza said.

The deal with Ford, if ratified by the union’s members, would preserve a single wage structure. Newly hired workers would start at 60 percent of the full wage and gradually reach top pay in 10 years instead of six years in the old contract.

GM and Chrysler have been insisting on a separate wage structure for new hires, similar to the United Auto Workers union’s deal with the Detroit Three in the U.S.

Lewenza vowed to break through that resistance and preserve the CAW tradition of reaching similar contracts with all three companies.

“We cannot, with good conscience, say to Ford, ‘We have compromised the pattern that you established,’ because quite frankly, it will give them an uncompetitive disadvantage, and we will not do that,” Lewenza said.

But when he was asked how far apart the CAW is in its discussions with GM and Chrysler, Lewenza said: “Miles, miles.”

The union could extend current contracts with either or both companies and continue talking.

“If you look at the last proposal from Chrysler and General Motors, the gap is so wide that quite frankly it is even hard to imagine” getting a deal quickly, Lewenza said. “But if they come and say, “We can work within the confines of that (Ford) pattern agreement,’ we can get the job done real quickly.”

Aaron Bragman, an automotive analyst with IHS Global Insight, said negotiations with both GM and Chrysler will be more difficult than with Ford.

GM has demonstrated a willingness to move production from Canada to the U.S.

In June, GM said it plans to move forward with a previously announced closing of an assembly line at its Oshawa assembly plant that makes the Chevrolet Impala full-size sedan and some Chevrolet Equinox SUVs.

GM is preparing to build the all-new 2013 Impala at its Detroit-Hamtramck factory and is shifting overflow production of the Equinox to Spring Hill, Tenn.

The Spring Hill plant was idled during GM’s 2009 Chapter 11 bankruptcy restructuring.

“The CAW is not negotiating from a position of strength when it comes to GM,” Bragman said.

GM declined to comment on the terms of the Ford agreement.

“Our efforts remain focused on working with the CAW to achieve an agreement that addresses the competitive needs of GM Canada,” the automaker said in a statement.

At Chrysler, the CAW is dealing with CEO Sergio Marchionne, who has lectured Lewenza in public about the need for absolute labor-cost parity between the U.S. and Canada.

Last year, in contract talks with the UAW, Marchionne scolded UAW President Bob King in writing for skipping a negotiating session with Chrysler so that he could meet with GM.

Earlier this month, Marchionne said that Chrysler would consider moving production out of Canada if the union didn’t agree to Chrysler’s demands.

The union decided Sunday to negotiate an agreement with Ford first. Lewenza said the Dearborn, Mich.-based automaker was the most receptive to a contract that is different from the UAW’s contract with the Detroit Three.

Ford, Lewenza said, pledged to invest in its Oakville, Ontario, plant and add 600 new jobs during over the life of the agreement.

“Chrysler’s goal in these negotiations is to develop an agreement that is conducive to long-term job security in Canada and we will continue to work with the CAW to get there,” Chrysler said in its statement.

Ford pledged to invest in the tooling to produce a new global platform at the Oakville plant in 2014 to produce the next- generation Ford Edge and Lincoln MKX.

If ratified, the agreement would provide Ford’s more than 4,500 CAW workers with three lump-sum payments of $2,000 during the four-year agreement and a $3,000 signing bonus. It does not, however, provide cost-of-living increases.

“We believe that the tentative agreement offers unique-to-Canada solutions that will improve the competitiveness of the Canadian operations while providing employees the opportunity to earn a good living,” Stacey Allerton, Ford’s vice president, human resources, said in a statement.

Lewenza said the deal with Ford “meets the objective of our union and meets the objectives of our members … but just as importantly, it meets the objectives of Ford Motor Company.”

Unlike the UAW, the CAW did not receive any profit-sharing commitments from Ford. The union also fell short of gaining a commitment for new engines at its plants in Windsor and Essex, Ontario.

“I think it’s certainly a modest deal in terms of cash outlays,” said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor, Mich. “It’s about $7,000 less than the UAW deal in lump sums and signing bonuses.”

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