CAW Reach Tentative Agreements On New National Labor Contract With The Big Three
The Canadian Auto Workers Union has reached a tentative settlement with Chrysler Canada by agreeing to a tentative contract that basically follows the pattern set during the union’s earlier negotiations with General Motors and Ford Motor Co. The agreement, if ratified by Chrysler workers, will bring another four years of labor peace to the Canadian auto industry’s biggest carmakers and its 21,000-member unionized workforce. The CAW also can claim a measure of victory in a difficult bargaining environment, having basically preserved jobs in Canada despite having the highest labor costs in North America.
While accepting cuts in starting wages, the CAW protected the principal that that workers will eventually grow to wage parity with veteran colleagues. New hires will start at a lower wage — $20 an hour instead of $24 — and will take ten years instead of six to reach the top rate, currently $34. They will also receive a weaker pension plan that combines the existing defined-benefit plan with a new defined-contribution plan.
The results of the negotiations prove that "if you stay united, if you stay focused, you can win justice," CAW President Ken Lewenza told reporters in Toronto following the settlement with Chrysler, the last of the Detroit Big Three to reach a deal. "I think Chrysler is better positioned as a result of this agreement." Like Ford and General Motors, Chrysler has agreed to a formula that will see existing workers receive $9,000 worth of bonuses over the life of the contract, but no wage increase.
At Ford and GM, the automakers agreed to create jobs to offset planning or existing layoffs, including 600 new jobs at Ford and 1,750 at GM. At Chrysler, the deal preserves three shifts at its Windsor minivan plant, the two shifts at the Brampton assembly plant, and the engine and office workers. In all, Chrysler employs about 8,000 CAW members. The deals contain no new product or investment guarantees after 2016, however.
Ford workers have already given an eighty-two percent "yes" vote to the Ford deal, while GM workers will finish voting today. Dates for the Chrysler ratification vote have not yet been announced. The agreement came after Chrysler submitted an economic proposal Tuesday evening that prompted an exchange of several proposals lasting through the night.
Lewenza has previously said the deal is the best the union could negotiate in the present economic climate. It’s certainly better than what the CAW was original faced with. The automakers came into the talks saying they needed to cut their labor costs to be more competitive with other Detroit Three plants in North America. Canada’s rising dollar has wiped out some of its competitive advantage relative to some lower-cost U.S. jurisdictions.
But the CAW, whose members made concessions during the government bailout of the industry in 2008-09, said they deserved to share in the automakers’ success. The union, Lewenza noted, successfully fought off the automakers’ demands for a permanent U.S.-style two-tier wage agreement and bonuses tied to company performance.
Whether the settlements in Canada will eventually lead the U.S.-based United Auto Workers Union to seek an end to its own two-tier system remains to be seen. The UAW approved four-year contracts with the Detroit makers last year and won’t return to the bargaining table again until 2015.