BUSINESS

CAW says Big 3 auto companies are making 'unprecedented demands' in negotiations

09/10/2012 03:31 EDT | Updated 11/10/2012 05:12 EST
The Canadian Auto Workers union says it's facing "unprecedented" demands from General Motors, Chrysler and Ford that would create a two-tiered workforce, eliminate cost-of-living adjustments and make dramatic changes to their pension plans.

The union said the automakers are seeking the elimination of a full pension for employees with 30 years service, a shift to a defined contribution pension plan for current workers, as well as cuts to prescription drug benefits.

The CAW also said the companies are refusing to commit to any new investments at its operations in Canada. If no agreement is reached in the next week, union members could go on strike early next week.

Each company has also insisted that any reward or bonus will be paid for by additional cuts to other areas of the agreement, the union said.

"The union recognizes the fragility of the industry and the need to stabilize fixed costs, while finding a solution that rewards members's work," the CAW bargaining committees said Monday in an update to members.

"Unfortunately, our efforts have not been met with equal willingness by the companies to negotiate fair terms."

The automakers offered few details on the progress of negotiations Monday.

Ford Canada spokeswoman Lauren More said the company remains "open to discussing any proposal that will improve labour cost competitiveness."

"We continue to work collaboratively with the CAW to find solutions that meet our mutual interest, which is to position our Canadian operations for future success," she said.

Faye Roberts of General Motors Canada said the company "continues to have open and constructive dialogue with our CAW partners."

"We are optimistic that we can continue to work together to overcome challenges, find creative solutions and improve our competitive position," she added.

A Chrysler spokeswoman declined comment.

Asked whether she would step in with back-to-work legislation in the event of a strike, Ontario's labour minister — who has jurisdiction over the province's auto sector — said Monday she doesn't want to speculate while talks are still underway.

"I think there's always that conversation that goes on about what happens if it goes wrong, but we're focused on the fact that people are still at the table, still talking," Linda Jeffrey said.

"There's a lot at stake and we have people that want to see this industry be successful and thrive, so I'm very hopeful."

She said provincial mediators are standing by should the parties ask for help.

General Motors, Chrysler and Ford are on the road to recovery after benefiting from cuts made during the crisis negotiations of 2009, but the CAW says it has no intention of making those kinds of deep cuts again.

The union has set a strike deadline of midnight on Sept. 17, but it has not yet announced which of the automakers will be targeted.

Tony Faria, an automotive expert at the University of Windsor, earlier predicted Chrysler will be chosen because it has the largest Canadian footprint of the Detroit Three and therefore has the most at stake.

"A week from the deadline, anxiety levels are understandably high and rising," said the update titled "Countdown to the Deadline."

To reach a deal, the committees said it was crucial to continue having faith in their elected representatives and support their bargaining committees, it concluded.

The last CAW strike 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.

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

GM said earlier this year that it was going ahead with a plan to close its consolidated plant in Oshawa, Ont., a move that will eliminate 2,000 jobs. The closure follows the shut down of a GM truck plant in Oshawa and a transmission factory in Windsor, Ont.

During the financial crisis, the federal and Ontario governments helped bailout Chrysler and GM with a rescue package that totalled about $13 billion — with the majority, $10.5 billion, going to GM.

The CAW represents approximately 4,500 workers at Ford, 8,000 workers at General Motors and another 8,000 at Chrysler.