Chrysler faces CAW pressure to add jobs, match GM, Ford deals
Detroit's smallest automaker takes hardest line against Canada labor costs
Canadian-produced models including minivans accounted for 28 percent of Chrysler's U.S. sales so far this year. Chrysler CEO Sergio Marchionne has taken a hard line with the CAW this year.
TORONTO (Reuters) -- Chrysler Group is under pressure to reach a contract deal with the Canadian Auto Workers or face a strike after the union reached a tentative agreement overnight with General Motors, leaving Chrysler the only Detroit Three automaker without a new labor deal in Canada.
But the union does not expect to reach a new contract agreement with Chrysler until Monday, CAW President Ken Lewenza told The Detroit News on Friday.
"My anticipation as of right now is to work through the preliminary stuff this weekend and I'm anticipating on Monday to dot the I's and cross the T's," Lewenza told the paper.
As of Friday afternoon, the union had yet to receive an economic proposal from Chrysler -- a key starting point and development in the negotiations, the paper said.
A CAW official said the union met with senior Chrysler officials on Friday morning at the downtown Toronto hotel where talks have been held for more than a month, and asked for a written proposal in response to the Ford pattern-setting deal.
CAW secretary-treasurer Peter Kennedy said it was unclear when the union would get Chrysler's response but in the meanwhile discussions would continue.
Talks would, however, slow down over the weekend as the CAW's leadership traveled to Ford plants in southern Ontario, where union members will vote on the CAW's agreement with the company.
Both GM and Ford have agreed to add or maintain hundreds of manufacturing jobs in Canada -- a key priority of the union.
The CAW "may be willing to give Chrysler 24 hours to move towards pretty much the exact same deal" as it reached with GM and Ford, said Tony Faria, a University of Windsor professor and auto industry expert.
"If they haven't gotten it in 24 hours, I am guessing they will give Chrysler their 24 hour warning that they are going to pull labor," Faria said.
Of the three automakers, Chrysler and its CEO Sergio Marchionne, have taken the hardest line on labor costs in Canada, insisting that they must come down to match those of the UAW in the United States.
The Detroit Three say Canada is the most expensive place in the world to assemble vehicles. Marchionne has threatened to move production out of Canada if labor costs don't come down.
Faria said Chrysler will ultimately have to accept the "pattern" agreement established at Ford and agreed to by GM or face a costly strike that would halt the production of some of the automaker's key products.
Chrysler's Windsor, Ontario, plant, is the sole source of its minivans in North America, and its Brampton, Ontario, plant, assembles the company's popular Charger and Challenger sedans.
"They can't afford a shutdown of those products. If Sergio Marchionne were to push Chrysler into a strike in Canada all that would happen is that he would lose whatever number of days of production and ultimately end up agreeing to the same deal anyhow," Faria said.
"It is up to him from there what he is going to do, if he is going to follow through on looking at possibly moving some activities out of Canada into the U.S. or Mexico. But he is going to have to make the decision as he is definitely going to
have this contract."
Pattern bargaining is a longstanding strategy of the CAW meant to ensure that no company has a labor cost advantage over the others. The CAW represents about 20,000 workers at the Detroit Three.
On Thursday night, the CAW and GM agreed on a deal that adds a third shift and 900 jobs to the "flex" line at its Oshawa, Ontario, assembly plant and creates 100 positions at its St. Catharines, Ontario, engine and transmission plant.
As at Ford, the agreement includes a wage freeze for existing workers for the first three years of the contract. Workers will get a cost-of-living adjustment in the fourth year, and a series of lump-sum bonuses. New hires will start at a
lower hourly rate than under the previous contract and take longer to reach the top level of the pay scale.Contact Automotive News