TORONTO, Canada

THE Canadian Auto Workers union and the Detroit three automakers have started negotiations on new labour contracts amid charges that Canada is the most expensive place in the world to produce a vehicle.

The CAW began negotiations with General Motors and Chrysler yesterday. They meet with Ford today.

GM CEO Dan Akerson said in June that Canada was the most expensive place on earth to build a car these days and noted that the exchange rate advantage of the Canadian dollar is gone. The Canadian dollar has traded around par with the US dollar in recent years after trading well below 90 cents for many years.

Chrysler CEO Sergio Marchionne has also said wage rates are uncompetitive in Canada.

CAW President Ken Lewenza disputed the claim that Canada is the most expensive place in the world to make a vehicle, but acknowledged Canadian auto workers cost more than US workers.

“We are a couple of bucks higher than our competitors in the United States and consistently on par with other automobile manufacturers like the Germans, the Japanese and others,” Lewenza said.

Lewenza said the higher Canadian dollar is a problem, but noted that GM and Ford are earning record profit margins on their North American business and that Chrysler’s has come back to profitability far faster than anyone hoped in 2009.

“Yet they have the nerve to say Canada is a terrible place to invest,” he said.

Lewenza noted the union made major concessions during the last round of talks in 2009 and said they now want to share in the profits now that the industry is profitable. The current contracts expire September 17. The union will focus talks on one of the automakers before then with the idea of setting a template deal for all three.

Lewenza said GM told the union yesterday morning that it was looking for a sustainable wage package and talked about reducing hourly compensation.