GM Reaches Four-Year Labor Accord With CAW Following Ford

General Motors Co. (GM) and the Canadian Auto Workers reached a tentative four-year labor agreement last night, avoiding a strike and leaving Chrysler Group LLC as the last of the major U.S. automakers without a union deal.

The agreement will “create or maintain” 1,750 jobs and calls for GM to invest C$675 million ($692 million) in its Canadian plants, Jim Stanford, a union economist, said at a news conference in Toronto.

The accord is subject to a ratification vote by CAW members. GM, based in Detroit, represents about 5,600 workers in Ontario in these talks, including those from a vehicle-assembly factory in Oshawa that makes the Chevrolet Impala and the Cadillac XTS, as well from a plant that produces V-8 and V-6 engines.

The deal comes after the CAW reached a tentative labor agreement at Ford Motor Co. (F) on Sept. 17 that mostly eliminated cost-of-living raises in favor of bonuses and won 600 new jobs. The union indefinitely extended a strike deadline that day with GM and Chrysler for more time to bargain an accord that matched terms of the Ford accord.

Under the extension, the CAW said it would keep bargaining until progress faltered. The union said it would then provide 24 hours’ notice before striking.

“Now we have Ford establishing the pattern, we have General Motors accepting the pattern, and tomorrow we go to work with Chrysler,” union President Ken Lewenza said at last night’s news conference.

Lump-Sum Payments

Lewenza said that GM matched lump-sum payments that Dearborn, Michigan-based Ford agreed to make. In the Ford deal, workers will get C$2,000 lump-sum payments in lieu of raises and a C$3,000 ratification bonus.

The GM accord also calls for the company’s consolidated assembly line in Oshawa, Ontario, which had been set to close June 2013, to be extended another year, and the company’s flex plant in Oshawa to add a third shift of 900 workers to help build the Chevrolet Impala, Lewenza said.

Rules guaranteeing that temporary workers can only be employed during peak employment periods, such as when new models go into production, will be more strictly enforced, the union president said. An engine and transmission plant in St. Catherines, Ontario, southwest of Toronto, will get 100 new jobs, he said.

The negotiations were “candid and constructive, reflecting the challenges facing Canadian manufacturers,” David Wenner, general director of labor relations for GM’s Canadian unit, said in a statement. GM declined to comment on details of the accord.

Ford, Chrysler

Made-in-Canada vehicles accounted for 15 percent of its U.S. sales this year through August, according to researcher Autodata Corp.

CAW-represented employees at Ford are scheduled to vote on ratification of that agreement this weekend. The CAW needs to finalize language on the GM accord and a vote schedule wasn’t announced at the news conference.

The union now turns to Chrysler, which is majority owned by Fiat SpA. (F) The CAW said in a statement yesterday it was making “gradual progress” with the Auburn Hills, Michigan-based automaker. At last night’s press conference, Lewenza said the company needed “to get serious.” Chrysler hasn’t made a counterproposal to terms of the Ford accord yet, he said.

“We look forward to continuing our discussions with the CAW,” LouAnn Gosselin, a Chrysler spokeswoman, said in an e- mail after the GM-CAW agreement was reached.

Speaking before the GM deal was announced, Jerry Dias, the union president’s assistant, said Chrysler was waiting to see the GM deal.

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

To contact the editors responsible for this story: Jacqueline Thorpe at jthorpe23@bloomberg.net; Jamie Butters at jbutters@bloomberg.net

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