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GM, Chrysler Talks With Canada Auto Union Extended

Talks between the Canadian Auto Workers, Chrysler Group LLC and General Motors Co. (GM) were extended past a strike deadline of midnight yesterday as the union said the parties needed more time to reach a deal.

The deadline has been extended indefinitely, and the union will give the companies 24 hours notice if workers plan to strike, CAW President Ken Lewenza told reporters at a Toronto hotel late yesterday.

“We can still provide the companies 24 hours notice if in fact we want to strike,” Lewenza said. “Since day one we weren’t looking for a strike we were looking for a settlement.”

The extension with GM and Chrysler comes after the union reached a tentative four-year deal yesterday with Ford Motor Co. (F) that mostly eliminated cost-of living raises in favor of bonuses and won 600 new jobs for the union. GM and Chrysler are examining the Ford deal after talks went late into the night, Shannon Devine, a CAW spokeswoman, said in a phone interview.

The union asked the companies to accept the same terms as Ford and threatened a strike if no agreements were reached by the initial deadline of 11:59 p.m. yesterday.

The talks with GM and Chrysler cover about 14,200 workers at factories around Ontario which produce models such as GM’s Chevrolet Camaro, and Chrysler Town & Country minivans.

“We have agreed with the CAW to extend the agreement,” Chrysler said in a statement, declining further comment. “We are currently reviewing the tentative agreement that has been reached with Ford.” GM, in a statement, called the dialogue “constructive.”

Loonie’s Surge

GM rose 2.6 percent to $24.43 at the close in New York. Ford gained 0.3 percent to $10.42.

Manufacturing in Canada has become more expensive as the nation’s currency has risen about 60 percent against the U.S. dollar during the past 10 years. 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. The union has said it would resist concessions in this year’s talks, citing the U.S. automakers’ return to profitability.

GM and Ford have moved to reduce operations in Canada during the past year. Ford last year closed its St. Thomas, Ontario, factory that made the Ford Crown Victoria and Lincoln Town Car sedans.

Profit Record

GM said that it plans to shut its consolidated assembly line in Oshawa, Ontario, in June 2013, which will eliminate 2,000 jobs, according to the CAW. The company plans to shift production of its Chevrolet Equinox sport-utility vehicle from the plant to Tennessee, where most workers will be paid less than $16 an hour. Oshawa is also where GM makes the new Cadillac XTS full-size luxury sedan.

Chrysler, based in Auburn Hills, Michigan, has about 8,000 production workers at Ontario vehicle-assembly plants in Brampton, near Toronto, and Windsor, outside of Detroit. GM, based in Detroit, has about 6,200 CAW-represented workers in Ontario, including a vehicle-assembly factory in Oshawa.

Last year GM set a full-year profit record and Ford earned more than in any year since 1998. This year both companies’ first-half net income was cut in half as continued strength in North America failed to offset economic turmoil in Europe.

Fiat SpA (F), Chrysler’s majority owner, posted first-half net income of 737 million euros ($961 million). Without Chrysler, the Italian manufacturer’s loss would have been 519 million euros. Fiat gained control of Chrysler during the U.S. company’s 2009 bankruptcy.

Canada will probably lose new-vehicle assembly work to lower-cost Mexico through the next decade, according to industry researcher R.L. Polk & Co. Canada’s share of North American car and light-truck assembly may slip to 12.6 percent in 2017 and 12.1 percent in 2022, from 15.8 percent this year, Polk said in a July 9 report on its website.

GM was the last carmaker to be hit by a strike in Canada, in 1996. That walkout lasted 20 days, paralyzing the company’s Canadian operations and forcing layoffs at other North American plants. Canada, which ranked as the world’s fourth-largest car producer in 1999, has slipped out of the top 10, the union said.

To contact the reporter on this story: Ari Altstedter in Toronto at aaltstedter@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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