CAW Not Seeking New Jobs in Chrysler Talks, Lewenza Says

The Canadian Auto Workers will not ask for new jobs in labor negotiations with Chrysler Group LLC and doesn’t expect to complete talks until the end of the week, the union’s leader said today.

Agreements with Ford Motor Co. (F) and General Motors Co. (GM) reached last week took three to five days of negotiating, and an accord with Chrysler will likely take the same amount of time, union President Ken Lewenza said by telephone from Toronto. The union will demand no layoffs occur during a new Chrysler contract, he said. The CAW represents about 8,000 Chrysler workers.

“We want their business plan to show full employment for the life of the collective agreement, obviously minus market conditions,” he said. LouAnn Gosselin, a Chrysler spokeswoman, didn’t immediately answer an e-mail seeking comment.

Four-year accords with GM and Ford included commitments for new jobs and investment in plants. The union said those plans plus incentives for early retirement will mean none of its members’ jobs will be eliminated. Auburn Hills, Michigan-based Chrysler doesn’t have any employees currently on layoff and hasn’t announced plans to reduce its Canadian operations.

An agreement between Chrysler and the union would maintain production of some of the company’s most important products.

The Dodge Grand Caravan and Chrysler Town & Country minivans built in Windsor, Ontario, were the fourth- and fifth-best selling models in the company’s lineup last year. Deliveries of the 300 sedan, made at Brampton, Ontario, surged 158 percent this year through August, tied for the biggest gain among its models.

Ford Ratification

Ford’s unionized employees ratified a four-year contract that eliminates most cost-of-living raises in favor of bonuses, extends the time it takes for a new employee to reach full pay and adds 600 jobs. The CAW is seeking a similar agreement at Chrysler.

The vote was 82 percent in favor at Ford, the Toronto-based union said yesterday in an e-mailed statement. Ford, based in Dearborn, Michigan, has about 4,500 CAW-represented workers in Ontario. The union is scheduled to conduct a ratification vote at GM on Sept. 26 and 27, according to a CAW statement.

The CAW opened contract talks with Ford, GM and Chrysler last month as the union struggles to keep jobs in Canada while the companies said Canadian workers are too expensive compared with other countries. The Canadian dollar has risen about 60 percent compared with its U.S. counterpart in the past decade.

‘Too Costly’

The union reached a tentative agreement with Detroit-based GM on Sept. 20. Negotiations with it and Chrysler continued after a Sept. 17 strike deadline was extended indefinitely.

Traditionally, the first agreement reached between the CAW and one of the U.S. automakers serves as a template for the other two. Chrysler is saying the pattern set by Ford and GM is too expensive, Lewenza said today.

“They’re just saying it’s too costly period,” he said. “They’re a smaller company, less profitable.”

Lewenza said one sticking point for Chrysler is a cost-of-living raise totaling 33 Canadian cents an hour (34 cents an hour) that kicked in at the end of the previous contract, which Chrysler wants removed from a new contract. Lewenza said the increase was maintained with the other two companies and the union will seek to maintain it with Chrysler.

The new agreements with Ford and GM largely do away with raises. In the deal ratified Sunday Ford workers will receive C$2,000 ($2,048) lump-sum payments in the contract’s second, third and fourth years, as well as a C$3,000 ratification bonus. The hourly rate for new hires will fall to C$20.40 from C$23.80 and the time to reach a base salary of C$34 will now be 10 years. It had taken six years, said Angelo DiCaro, a union spokesman.

Retirement Plans

The Ford and GM contracts alter retirement plans for new hires, moving half the pension into a defined-contribution plan where workers are only guaranteed what they pay in. The rest will come from the union’s defined benefit plan, which guarantees a certain amount at retirement, and obliges the company to make up the shortfall if the pension fund underperforms.

Ford agreed to add a third shift at an Oakville, Ontario, vehicle-assembly factory and bring some work in-house, which will add about 300 jobs, the company said in a statement yesterday. The automaker also plans “a product based on a new global platform” at the plant that has the potential to add about 300 additional jobs, according to Ford.

Ford gained “significant cost-savings,” according to the statement from the company.

The CAW said it would keep bargaining with Chrysler until progress faltered, and would then provide 24 hours’ notice before striking.

Ford slipped 0.8 percent to $10.32 at the close in New York. GM shares fell 1.8 percent to $24.36.

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.