Chrysler Reaches Labor Accord With CAW, Avoids Strike

Chrysler Group LLC, majority-owned by Fiat SpA (F), and the Canadian Auto Workers union reached a four- year labor agreement yesterday, avoiding a strike and wrapping up the latest round of negotiations with the major U.S automakers.

“We feel good about this collective agreement,” union President Ken Lewenza said at a news conference in Toronto. “We feel damn good about Chrysler.”

The accord is subject to a ratification vote by CAW members, scheduled for this weekend. Chrysler, based in Auburn Hills, Michigan, has about 8,000 production workers in Ontario including vehicle-assembly plants in Brampton, near Toronto, and Windsor, outside of Detroit. Chrysler, in an e-mailed statement, declined to comment about the tentative agreement.

The Chrysler deal follows a pattern set in deals signed by Ford Motor Co. (F) and General Motors Co. (GM), Lewenza said. The Ford and GM accords mostly eliminate cost-of-living raises in favor of bonuses, lower the starting wage and extend the time it takes for a new hire to reach the top pay grade.

An agreement between Chrysler and its Canadian union workers maintains production of some of the company’s most important products. The Dodge Grand Caravan and Chrysler Town & Country minivans built in Windsor were the fourth- and fifth- best selling models in the company’s lineup last year. Deliveries of the 300 sedan surged 158 percent this year through August, the biggest gain among its models.

Lump-Sum Payments

Lewenza said yesterday that Chrysler matched lump-sum payments that Detroit, Michigan-based GM and Dearborn, Michigan- based Ford agreed to make. In those deals, workers will get C$2,000 ($2,033) lump-sum payments in lieu of raises and a C$3,000 ratification bonus.

Chrysler didn’t make investment commitments for Canadian operations, Lewenza said. The accord does provide Chrysler savings and “has positioned us for future investment,” he said.

Chrysler Chief Executive Officer Sergio Marchionne “has got a lot of reasons to invest in Canada and at the end of the day I want Mr. Marchionne to focus on the many challenges he has in Europe and let us pay the bills in Canada,” the CAW president said yesterday. Marchionne is also CEO of Turin, Italy-based Fiat.

Ford committed to 600 new jobs while GM agreed to add 1,000 new positions to offset the loss of 2,000 jobs at a plant that was set to close June 2013, and will now stay open a year longer under the new agreement. Ford CAW members have ratified their labor agreement. GM union members are scheduled to conclude voting today.

With the Canadian dollar up about 60 percent against its U.S. counterpart in the past 10 years, reducing labor costs was a focus for all three car companies at the negotiations’ outset.

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

To contact the editor responsible for this story: Jacqueline Thorpe at jthorpe23@bloomberg.net

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