MRO Magazine

Canadian auto workers' union will target Chrysler in negotiations, expert says


August 20, 2012
By PEM Magazine

TORONTO — The Canadian Auto Workers is expected to wait until after Labour Day before it picks which U.S. automaker it will target first in its latest round of bargaining, but one expert is predicting it will be Chrysler Canada Inc.

Tony Faria, an automotive expert at the University of Windsor, predicted Chrysler will be chosen because it has the largest Canadian footprint of the Detroit Three and therefore has the most at stake.

“They can least afford a shutdown of operations in Canada, so they’re the most vulnerable in terms of a strike threat,” Faria said Wednesday.

“But even though Chrysler is not pushing for two-tiered wages, Chrysler is going to push hard for lower starting wages.”


Chrysler has assembly plants in Windsor and Brampton, Ont., as well as a casting plant in Toronto. It produces the Town and Country, Dodge Grand Caravan, Dodge Charger, Dodge Challenger and Chrysler 300 in Canada.

Pattern bargaining means the deal that’s hammered out with the target company will set a precedent for talks with the other two automakers.

Faria predicted the companies will ask to lower the starting wage for new hires to 60 per cent of the full rate, from 70 per cent, and to stretch the time it takes for new hires to reach the full wage to eight years, from six.

The union held its first round of meetings with Ford on Wednesday after brief meetings with General Motors and Chrysler on Tuesday.

The CAW, which made concessions to wages, vacation time and other benefits when the U.S. automakers were struggling during the 2008-09 recession, has said it wants to share in the profits now that the industry has rebounded.

“The companies have profited because of our members’ sacrifices,” CAW national president Ken Lewenza said Tuesday.

Ford said its focus during the Wednesday meeting was on improving competitiveness at its Canadian operations.

“Right now, labour costs are higher in Canada than at any other Ford operation in the world,” the company said in a statement.

“When it comes to future investment, labour costs are one of the most important considerations.”

Ford said hourly wages for CAW assemblers are around $34 an hour, while assemblers in the U.S. are paid about $28 per hour.

The company said all-in labour costs, which include pensions and health care, are approximately $79 per hour in Canada, versus $64 per hour in the U.S.

“We are interested in talking about any approach that will help improve the competitive position of the Canadian operations,” the company said.

“Ford is committed to working with the CAW to find innovative, unique-to-Canada solutions which improve competitiveness while providing employees with the opportunity to earn a good living.”

Ontario has seen the U.S. carmakers — GM, Ford and Chrysler — cut thousands of jobs in the last decade as their parent companies restructured in the United States.

GM said earlier this year that it was going ahead with a plan to close its consolidated plant, a move that will eliminate 2,000 jobs. The closure follows the shut down of a GM truck plant in Oshawa and a transmission factory in Windsor, Ont.

During the financial crisis, the federal and Ontario governments helped bailout Chrysler and GM with a rescue package that totalled about $13 billion — with the majority, $10.5 billion, going to GM.

The CAW represents approximately 4,500 workers at Ford, 8,000 workers at General Motors and another 8,000 at Chrysler.