Canada - CAW reaches tentative deals with GM, Chrysler

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WINDSOR, Ont. - The Canadian Auto Workers union reached master agreements with both Chrysler and General Motors Thursday.

Both Chrysler and GM agreed to match the wages and benefits in the three-year contract agreed to by Ford of Canada, said CAW president Buzz Hargrove. The deals freeze wages for three years but provide cost-of-living adjustment in the second and third years.

About 12,000 CAW members who work for GM Canada employees are expected to ratify the labour contract when they vote on it today. About 9,600 Chrysler Canada employees are expected to ratify the deal Saturday. Ford of Canada's 8,500 CAW workers ratified their deal a week ago.

The agreement gives GM's unionized Windsor, Ont., workforce - who learned this week their jobs won't extend past mid-2010 - severance packages of up to $125,000 each, depending on age, seniority and skill level. Most will receive pensions, Hargrove said.

"I think the members are going to be pleasantly surprised," Hargrove said.

At Chrysler, the new deal restates in writing Windsor Assembly's role as the "lead plant" for the company's minivan line. That's a big win, CAW Local 444 president Ken Lewenza said, because the union entered into early contract negotiations three months ago believing the third shift at this plant was at serious risk of long-term layoff.

Market conditions permitting, Hargrove said he expects Windsor Assembly will still have a third shift when the new contract expires in the fall of 2011.

The CAW decided a "get in, get out" strategy was the correct one for bargaining this year because every added week of negotiations with Ford, GM and Chrysler would have cost the union more in terms of givebacks as the North American economy deteriorated. Hargrove said he even urged bargaining subcommittees to avoid meeting with their company counterparts because it seemed every encounter was costing the union more in changes to work rules the automakers wanted.

The fact the union got out with what is still has intact, while avoiding the two-tier wage structure forced on the United Auto Workers in the U.S., makes the deal "historic," Hargrove said.

"We avoided an internal fight in the union over whether or not there should be two-tier wages," he said.

Hargrove called his final set of negotiations as president of the union "an incredible ride" because of the pressure on the union to preserve jobs.

Chrysler Canada issued a statement saying it was "pleased" with the tentative agreement.

"We believe this agreement recognizes the contributions of our CAW workforce, while helping contribute to Chrysler Canada 's overall competitiveness," Al Iacobelli, vice-president of union relations for Chrysler, said in a statement.

Cheryl Ollila, GM's head of labour relations in the negotiations, said the agreement "provides both the company and the members with the foundation for improving GM's competitive position."

Among other key aspects of the 2008 agreement:

. GM has agreed to maintain two full shifts of workers at its Oshawa, Ont., truck plant. Instead of sending one shift home on indefinite layoff due to collapsing pickup truck sales, the company will allow an alternating layoff schedule. Each shift will take turns on two-week layoffs - two weeks on, two weeks off - for a full year or until pickup truck sales recover.

Hargrove says the union believes the full hybrid version of its Chevy Silverado pickup truck, which GM is just in the process of launching now in Oshawa, will sell much better than the company thinks it will once it reaches showrooms in the fall.

"We believe the hybrid is going to be a big seller - why send a whole shift home?" before consumers have a chance to prove the union right, he said.

. Chrysler has agreed to commit to building the next-generation of passenger sedans at its Brampton Assembly Plant, northwest of Toronto. The next 300 series of sedans, which includes the Dodge Charger and Challenger, will go into production in 2010.

. Chrysler has agreed to keep its Etobicoke Casting plant in Toronto open for another three years, until mid 2011, when it will attempt to find a friendly buyer among its suppliers, Hargrove said.

"Chrysler has been trying to close Etobicoke Casting for 15 years" because it can buy the same castings much cheaper elsewhere, he said.

. GM has recommitted to producing a new six-speed transmission in St. Catharines, Ont., another major win for the union, Hargrove said. Production of the new gear box had become doubtful because of GM's sliding market share. GM will also bring a new fuel-efficient V-8 engine to St. Catharines.

. GM has agreed to extend the life of the Chevrolet Impala by two years and add another vehicle line to its Oshawa Flex Plant. The Oshawa car plant, which used to have two separate car lines, now produces the Impala and will soon produce the Chevrolet Camaro.

. GM will keep building the Impala until 2012, instead of ending production in 2010 as it had planned, and it will add a new product line it has not yet identified to be built alongside the Camaro and Camaro convertible, Hargrove said. GM expects the Camaro to sell about 130,000 units per year and the other product to take up some of the slack left when the Impala production ends. The Impala remains one of the few vehicles in the world to sell more than 400,000 units per year.