BUSINESS

Canadian Auto Workers Strike? CAW's Battle With Big 3 Marks Pivotal Moment For Unions In Canada

09/14/2012 05:32 EDT | Updated 09/14/2012 12:38 EDT
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One of the most intense rounds of auto-sector contracts talks in recent memory could become a defining moment in the struggle of Canada’s labour movement to regain its footing amid flagging membership, a decline in public support and a tougher corporate stance.

If the Canadian Auto Workers union (CAW) cannot reach an agreement with Ford, Chrysler and General Motors by 11:59 p.m. ET on Monday, more than 20,000 hourly auto workers could walk off the job in what would be the first CAW strike at an auto plant since 1996.

At stake are jobs, corporate earnings and the reputation of the CAW. After a recession that brought the industry to its knees and forced the CAW to adopt a more conciliatory approach, the union is reasserting itself and pushing back hard against demands it calls “unprecedented.”

But with Detroit automakers posting higher profits than ever before, and the potential merger of two of Canada’s biggest private-sector unions hanging in the balance, the outcome of these negotiations will be viewed by some as a larger statement on the post-recessionary relevance of Big Labour.

“If they [the CAW] make these concessions, it’s a real disaster,” said Sam Gindin, who has held high-ranking positions within both the Canadian arm of the United Auto Workers (UAW) and the CAW, and who now serves as the Packer Chair in Social Justice at York University.

“It would be significant because they’re a key union, and it sends a signal everywhere.”

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Yet in the current climate of economic uncertainty, where cheaper U.S. production costs threaten to make it more difficult to keep auto jobs in Canada, defiance could come at a price.

“There is a risk that as these [Canadian] plants get older, the Big Three won’t refurbish them, they’ll simply open up a new plant somewhere else,” said Mike Moffatt, a labour expert at Western University’s Ivey School of Business.

“The CAW could still lose here even if they win.”

Since its inception in the mid-1980s, when the CAW split from the U.S.-based UAW, the union’s tough approach to bargaining with the Detroit automakers has been a fundamental pillar of its DNA. While its American counterpart has tended to be more conciliatory, the CAW — bolstered by a weak Canadian dollar — has traditionally pushed back against significant concessions.

But this position has been compromised in recent years by cheaper foreign alternatives, the rising value of the loonie and a deep recession that crippled Detroit automakers. There have been tens of thousands of job losses and dozens of plant closings. In 1990, the CAW represented more than 65,000 Big Three workers (excluding auto parts); today the union represents about 25,000, a decline of more than half. (The CAW now represents a total of 195,000 workers across all industries.)

All these factors have chipped away at the willingness of the CAW’s top brass to make good on strike threats while bargaining with The Big Three, said Stephanie Ross, a labour expert at York University in Toronto.

Over the past decade, the CAW veered away from militancy toward more co-operation with management in the bargaining process and on the shop floor “to contain the damage that has been in some way accepted as inevitable,” she said.

“Turning away from militancy has created some really important internal tensions in the union — a sense that it’s not the union that it once was, and a sense of dismay or defeat amongst the membership,” Ross said.

According to Gindin, the union’s response to the recent lockout at Caterpillar’s Electro-Motive Diesel plant in London, Ont., is evidence of its diminished might.

“You saw a lot of trying to mobilize a community against a multinational that wants to cut your wages in half, but they didn’t take over the plant,” he said.

“In the past, the CAW would have taken over that plant. They would have said, ‘We don’t know if we’ll win if we take it over, but we know we will lose if we don’t, and it’s worth the risk’,” he said.

CAW national president Ken Lewenza disputes this assertion, insisting that there was nothing to be gained by occupying the locomotive assembly plant when workers were locked out in January. Some 481 CAW members had refused to accept a 50-per-cent pay cut while the company enjoyed record profits.

“We had the public attention anyway,” Lewenza said.

Although the CAW has occupied plants in recent years to win severance for its members, Lewenza said this wasn’t necessary in the case of Electro-Motive because the company proposal was in line with what the union had requested.

As he sees it, “the terminology of militancy is over-exaggerated” in relation to the CAW, which has avoided auto strikes throughout its history, with the exception of the 1996 walkout at General Motors.

“We’ll utilize militancy when it’s necessary, not just to say, ‘We’re militant.’ Common sense has got to prevail,” he said.

For most of the past decade, Lewenza said the CAW has tried to save jobs in companies that were losing significant dollars, particularly during the recession, when Chrysler and GM plunged into bankruptcy and government bailouts were required to keep the assembly lines moving.

“Each one of those negotiations was, ‘How do we reduce the employment levels of these corporations and minimize the pain on our members?’,” he said.

Yet there’s no question that the CAW top brass have taken their sparring gloves off the shelf for this round of negotiations, which occurs as The Big Three enjoy some of their most robust profits on record. (Story continues below)

In addition to what it calls “unprecedented” demands from the companies, the CAW must contend with a membership pushed to the brink by layoffs and plant closings. The union is also attempting to prove its worth to the Communications, Energy and Paperworkers Union of Canada (CEP), whose membership will vote in October on whether to join the CAW to create the largest private-sector union in the country. (The United Food and Commercial Workers Canada currently occupies that position with more than 250,000 members.)

According to former CAW national president Buzz Hargrove, the impending vote makes this a pivotal moment for his union, whose membership approved the merger in August.

“A lot of people in the CAW and the CEP outside of auto are watching this. This is some form of test of the ability of the union to fight when the companies are doing well,” Hargrove told The Huffington Post.

“It’s one thing to concede the arguments when the companies are in trouble, but it’s another thing when they’re making record profits.”

Ross concurs.

“They’re trying to project a particular kind of union — a union that can effectively fight for its members. It is an attempt to reinvigorate what we knew of the CAW from its first 10 to 15 years,” she said.

The battle has been fierce. Breaking from a decades-long tradition of identifying a “target” company and using that deal to broker agreements with the two remaining firms, the CAW continues to press all three companies at the same time, even with the deadline just days away.

According to the union, the concessions the companies want include the elimination of the “30-and-out pension”; the creation of a two-tier workforce mirroring the UAW agreement; the replacement of the defined-benefit pension plan with a defined-contribution plan, which ties retirement funds to stock market performance, and an end to the Cost of Living Adjustment (COLA).

“We have been far from overzealous, and yet the proposals on the table from all three companies are something I’ve never seen in the history of collective bargaining,” Lewenza told HuffPost. “They’re the worst during the very best times of the corporations.”

Armed with exceptionally strong strike mandates from its members, the CAW has promised to reject those demands, making clear it is prepared to strike at all three firms if an agreement is not reached by the Sept. 17 deadline.

“The threat of a strike has certainly captured the attention of the media and company executives alike. Over the last few days, meetings have picked up and are now taking place more frequently. Much to our disappointment though, these meetings have not yielded many results,” the union said in a leaflet distributed to its members in Canadian auto plants on Wednesday.

“We’re still hopeful that we can avoid a strike by reaching a new agreement with at least one of the companies. Collectively though, we must be ready for any outcome.”

Labour costs remain the primary sticking point for the companies.

In an email on Wednesday, GM Canada spokeswoman Faye Roberts told HuffPost that 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 said.

Ford Canada spokeswoman Lauren More said the firm is also working “collaboratively with the CAW to find solutions that meet our mutual interest,” and it remains “open to discussing any proposal that will improve labour cost competitiveness.”

“Right now, labour costs are higher in Canada than at any other Ford operation in the world,” she said.

Chrysler did not respond to questions from HuffPost. But reports indicate that while GM and Ford have adopted a more conciliatory tone, Chrysler — which has one-quarter of its North American production in Canada — isn’t budging.

Chrysler CEO Sergio Marchionne told The Globe and Mail last week that the hourly wage differential must be eliminated if the company is to keep on investing in its Canadian operations.

Nobody in their right mind would continue to create an unlevel playing field in its own organization,” he said. “It’s impossible. We have other plants, other options.”

Several days remain until the strike deadline, and anything can happen. News reports suggest that the union has met a key demand of the auto makers by laying out a proposal to cut wages for new employees.

According to Tony Faria, an auto industry expert at the University of Windsor, a prolonged work stoppage, particularly if it hit Chrysler, whose U.S. and Canadian operations are deeply integrated, would result in the loss of jobs and production in Canada.

“If you get Sergio Marchionne mad enough, that’s the end of the casting plant in Toronto. Because it’s going to be one thing if the CAW closes Canadian plants, but having their actions affect [Chrysler’s] U.S. plants, he’s not going to put up with that,” he said.

As Moffatt sees it, however, the pressure on the CAW is such that “if the decision is between taking a terrible deal and going on strike, I think they will go on strike.”

“This union is just tired of getting its teeth kicked in. I think there is some willingness to stand up and fight,” he said.

Brian Childerhose, who expects to be laid off along with his wife later this year, when GM eliminates the third shift at its consolidated plant in Oshawa, Ont., before closing the facility in 2013, certainly feels this way.

The 34-year-old union representative said there is a “mixed bag of emotions” on the shop floor about the possibility of a strike but that even among those workers who will be bumped into positions at GM’s nearby flex plant, the consensus is that “enough is enough.”

“We need to take a stand at some point. We can’t just keep giving up concessions and everything our fathers and our grandfathers fought for in this union,” he said.

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