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26. September 2012

Canadian auto union makes progress with GM

AP reported that the head of the Canadian Auto Workers said that there has been significant progress toward a new labor deal with General Motors and said the Detroit automaker is waiting for a counter proposal from the union.

CAW president Mr Ken Lewenza said that they will make the offer Wednesday. He also said they've made progress with Chrysler, but not as much as they've made with GM.

The union decided to keep working past a midnight strike deadline after reaching a tentative deal with Ford and extending its contracts with GM and Chrysler.

Workers are staying on the job as talks continue, but can go on strike after giving GM and Chrysler 24 hours' notice. 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.

Mr Lewenza said that "We're not going to get a settlement tonight, but boy, I see a significant amount of progress at General Motors."

Mr Lewenza said Chrysler is still studying the Ford deal. He said there has been no real signal from Chrysler that they'll meet the pattern set by Ford, but said there has been good faith bargaining. Chrysler earlier took issue with the CAW focusing its efforts on Ford, saying Ford has smaller operations in Canada than Chrysler and GM do.

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.

According to the CAW, under the Ford deal, the company will pay new workers 60% of the current top wage of CAD 33.89 an hour. 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.

The auto companies say Canada is the most expensive place in the world to make cars and trucks, and they could move production south if the CAW doesn't cut costs. The CAW represents about 21,000 auto workers in Canada and about 16% of auto production in North America.

GM and Chrysler make popular models in Canada that would soon be in short supply if there's a strike. CAW workers also make key engine parts and other components for US built cars.

Industry analysts said that a strike would be felt in US factories in a week or less, and dealers could quickly run short of some models, largely because they haven't built up stocks due to higher demand for cars and trucks in the US. In Canada, GM makes the Chevrolet Camaro, Impala and Equinox, along with the Buick Regal, Cadillac XTS and GMC Terrain. Chrysler makes minivans and the Dodge Challenger and Charger, Chrysler 300 and Ram Cargo Van in Canada.

The deal with Ford averts a strike there, and 800 laid off Ford employees will go back to work, partially through the creation of 600 new jobs at Canadian operations.

Canada's advantages in the past, a weak Canadian dollar and government health care, have all but vanished compared with US factories. In addition, the United Auto Workers union in the US has agreed to steeper concessions than the CAW, making US labor costs cheaper. Going into the talks, the Detroit automakers were paying an estimated USD 60 to USD 62 an hour for labor and benefits in Canada, compared with USD 50 an hour at Chrysler, USD 56 at Ford and USD 58 at GM.

The federal Canadian and Ontario province governments worked in tandem with the US government on auto bailouts in 2009 to maintain Canada's share of North American auto production. Canada's share peaked at 3.2 million cars in 1999, about 17.4% of North American production. In 2011, Canada produced 2.1 million vehicles or about 16%.

Source - Associated Press

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