Business

Canada auto union extends contracts

Wednesday, September 19, 2012    

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TORONTO, Canada - THE Canadian Auto Workers union decided to keep working past a midnight strike deadline after reaching a deal with Ford and extending its contracts with General Motors and Chrysler.

Workers will stay on the job as talks continue, but can go on strike after giving GM and Chrysler 24 hours' notice, President Ken Lewenza said late Monday. The union, he said, agreed to the contract extensions because top labour executives at both companies asked for more time to study the deal with Ford. The CAW wants the Ford contract to serve as a template for the other two companies.

Ford Motor Co workers will vote on their agreement next weekend. It cuts wages for new hires and freezes pay for current workers. But it also gives them lump-sum payments to cover inflation and for ratifying the deal.

Lewenza said top negotiators for both GM and Chrysler came to Toronto to try to finalise a deal, and both requested more time to review the Ford pact and settle plant-level contracts.

"At the end of the day, we're hopeful we'll get a deal," he said. "If it's good enough for Ford, it's good enough for General Motors and for Chrysler."

But Lewenza warned that he won't hesitate to strike if he feels the companies are procrastinating over the next two or three days.

"Our patience only has so much time," he said.

Both General Motors Co and Chrysler Group confirmed late Monday that they were continuing to talk but didn't give further details.

Under the Ford deal, the company will pay new workers 60 per cent of the current top wage of CAD$33.89 ($3,100) an hour, according to the CAW. That would mean new workers would be paid around CAD$20.33. They can move up the wage scale and reach the top wage in 10 years.

US workers at the Detroit automakers approved a similar two-tier wage agreement five years ago, but in those agreements, workers don't automatically get the top wage after 10 years.

There are no base wage increases during the life of the CAW agreement, which lasts until September 2016, but each employee will receive a US$2,000 ($180,000) lump sum payment that will cover cost of living increases and a US$3,000 ratification bonus.

If GM and Chrysler don't go along Ford, that could mean labour trouble, said Art Schwartz, a former General Motors negotiator who now runs a labour consulting business in Ann Arbor, Mich.

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