CAW reaches tentative deal with GM, Chrysler remains

TORONTO – The Canadian Auto Workers union hammered out a tentative agreement with General Motors on Thursday that will keep some 1,750 jobs in Ontario, making Chrysler the final of the Detroit Big Three still at the bargaining table.

“This was a difficult couple days,” CAW president Ken Lewenza told a news conference Thursday night. “It was tough sledding.”

“At the end of the day what came out of this thing is consistent with what we did at Ford,” said a tired-looking Lewenza, whose union has been in round-the-clock negotiations since Monday when a midnight strike deadline was put off after the union reached a deal with Ford.

After reaching a tentative deal with Ford on Monday, the CAW turned to getting similar deals at both Chrysler and General Motors — a practice known as pattern bargaining.

Lewenza said the GM deal incorporates the entire Ford pattern — including a 10-year progression to full pay and a hybrid pension plan for new employees, as well as a $2,000 annual cost of living lump sum payment and a $3,000 ratification bonus for all employees.

The GM deal will also see 1,750 jobs created, maintained or extended.

That includes 900 jobs through the addition of a third shift at the flex plant in Oshawa, Ont., beginning early next year, and the extension of the life of the consolidated plant in Oshawa, which had been slated to close in 2013. Instead, the company will continue to operate at least one shift until June of 2014, extending at least 750 jobs and potentially more if a second shift is also extended.

In addition, about 100 new positions will be created or maintained at its plant in St. Catharines, Ont.

The company also committed to $675-million in investments over the term of the agreement.

The agreement also reverses concessions made in the last round of bargaining that allowed to use temporary workers indefinitely, and limits the use of those workers during the launch of a new vehicle.

“What I get out of this set of negotiations is for the first time in over 20 years at the end of this collective agreement we will have no seniority workers on layoff at General Motors,” Lewenza said.

“And if the market conditions improve as General Motors rebuilds their company, we’ll have the opportunity to give young people jobs at General Motors for the first time in two darn decades if not more.”

The key sticking point in negotiations was over a two-tier wage system — GM wanted to see new hires permanently earn less than current employees, Lewenza said.

He urged Chrysler to “get serious” and table a proposal that follows the pattern, adding that it seemed “reluctant” to do so, appearing to make a “strategic decision” to allow the union to focus on GM, but talks continue with the automaker.

Earlier Thursday, the union indicated it was making some headway with Chrysler, saying the company seems to be more willing than it was to reach an agreement.

Still, the union is in legal position to strike if at any point progress seriously stalls in the talks. It has said it will give 24 hours notice before a work stoppage.

Canadian Ford auto workers will vote this weekend on the tentative agreement and the CAW said results of the vote will be released on Sunday night. The vote for GM workers has yet to be scheduled.

GM Canada said late Thursday that the four-year tentative deal covering about 5,500 CAW members was arrived at around 9 p.m. ET, adding that it would not disclose terms of the agreement because it was still subject to ratification.

“This set of talks with our labour partner have been candid and constructive, reflecting the challenges facing Canadian manufacturers,” it added.

The Ford deal contains no increases to base wages and pension plans will remain the same for existing employees. Each worker will get $2,000 a year in the second, third and fourth years to cover cost-of-living increases, and a $3,000 ratification bonus.

New hires will make 60 per cent of full pay, which would be reached after 10 years — rather than after six years as in the last collective agreement. New hires will also be signed up for a hybrid pension plan, rather than a defined benefit plan for current workers.

The Ford deal will also give 800 laid off employees a chance to get back to work, partially through the creation of 600 new jobs at its Canadian operations. Most of the those positions will be at Ford’s assembly plant its Oakville, Ont.

All of the Detroit big three companies were equally aggressive on asking for concessions originally, but Ford was the first to come around.

The last strike by the CAW — which represents nearly 21,000 members at the big three automakers’ plants in Ontario — was in 1996 against General Motors.

Ford has said hourly wages for CAW assemblers are around $34 an hour, while assemblers in the U.S. are paid about $28 per hour. The company said all-in labour costs, which include pensions and health care, are approximately $79 per hour in Canada, versus $64 per hour in the U.S.

The strong Canadian dollar is also eroding competitiveness.

Ontario has seen the U.S.-based car makers cut thousands of jobs in the last decade as their parent companies restructured in the United States.

General Motors and its Canadian subsidiary were nearly felled by the economic downturn in 2009, which compounded years of losses at the automaker.

It survived by filing for bankruptcy protection in the United States and restructuring its operations with the help of billions of dollars in aid from governments both in Canada and the United States.

Ottawa took an eight per cent stake in the automaker and Ontario took another four per cent after they together lent it C$10.5 billion.