CAW Leader Sees No Progress in GM, Ford, Chrysler Talks

The Canadian Auto Workers hasn’t made progress in labor negotiations with Chrysler Group LLC, General Motors Co. (GM) and Ford Motor Co. (F) as current contracts near expiration, union President Ken Lewenza said.

“The reality is, all three companies from my perspective are overzealous,” Lewenza said in a telephone interview. “All three companies have incredible demands on the table.”

Lewenza contradicted comments earlier today by Chrysler Chief Executive Officer Sergio Marchionne, who told reporters in Detroit he has seen “some progress” in the labor negotiations. Marchionne said the two sides still have a “long road to travel between now and conclusion.”

The CAW represents more than 20,000 employees at the three automakers. The union’s current contracts with the companies expire at 11:59 p.m. on Sept. 17. The negotiations have been affected by the Canadian dollar, which has risen about 60 percent against the U.S. dollar in the past decade, making manufacturing more expensive in the country.

“I don’t know where Mr. Marchionne got the impression of progress,” Lewenza said in today’s interview. “It’s very, very tough sledding. I haven’t seen much movement from the company at all.”

Negotiations have intensified and some “senior executives from the three companies are now arriving in Toronto or are already participating in the discussions,” according to an update to members issued today by the CAW. Lewenza and Peter Kennedy, the union’s secretary-treasurer, confirmed in separate interviews that company executives are taking part in the talks.

No ‘Target’

If the union can’t reach “fair agreements before the deadline,” it will stop work “as required” at any of the automakers, according to a union update.

GM is “optimistic that we can continue to work together to overcome challenges, find creative solutions and improve our competitive position,” Adria MacKenzie, a spokeswoman for the company’s Canadian unit, said in an e-mail. She deemed the talks “open and constructive.”

Lauren More, a spokeswoman for Ford, didn’t immediately respond to an e-mail seeking comment today.

In a departure from previous negotiations, the CAW hasn’t yet announced a so-called target company in its discussions. In the past, the union would concentrate its negotiating efforts on the target company and seek to extend terms of an agreement to the other automakers. This time, the CAW is negotiating simultaneously with all three carmakers.

“Initially, not one of the three was giving us any indication at all that we could get a deal done with them,” Kennedy said by telephone. “The only way to force their hands is to say that potentially we’ll all be on strike if we don’t get a deal.”

Picket Signs

Picket signs are being shipped to all GM, Ford and Chrysler local unions today in preparation for a strike should discussions fail, according to a CAW post on Twitter.

Demands by the carmakers, according to the CAW, include cuts in benefits, the elimination of an annual cost-of-living adjustment and the transfer of all workers to a defined- contribution retirement plan. GM, Ford and Chrysler are also refusing to commit to new Canadian factory investments, the CAW said in a Sept. 10 leaflet.

Kennedy said the union’s latest proposal calls for a new salary scale and allows the companies to save on pension payments, while preserving annual cost-of-living adjustments. Under the current agreement, new employees start at 70 percent of the top wage and take six years to reach it.

“Under the system we proposed, the start point will be lower, and the goal posts will be further out,” Kennedy said. “Our objective in these negotiations is to reward our members for the sacrifices they made which, in no small part, has resulted in the turnaround in the companies.”

The CAW accepted a pay freeze and gave up bonuses and time off along with other concessions as part of the restructuring that brought GM and Chrysler out of bankruptcy in 2009.

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Jamie Butters at jbutters@bloomberg.net

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