Manufacturing AUTOMATION

CAW reaches deal with Chrysler

September 27, 2012
By Diana Mehta

The Canadian Auto Workers union reached a tentative agreement with Chrysler on Wednesday, signalling a successful culmination of labour negotiations at all Big Three automakers without resorting to a strike.

 The latest deal meets the pattern set in agreements already reached with Ford and General Motors, said CAW president Ken Lewenza.

“Pattern bargaining in the CAW is incredibly important and in the last couple days, especially in the last 24 hours, I think Chrysler has recognized the importance of pattern bargaining,” he said.

“This is not just about a collective agreement. It’s about integrity, it’s about credibility, it’s about making sure that pattern bargaining works in Canada today in every set of negotiations moving forward.”


Chrysler will be better positioned in the industry as a result of the negotiations, he added.

“We can now work together to grow this business, to provide employment opportunities, to make sure that we’re positioned for the future,” Lewenza said.

The union’s tone with Chrysler changed dramatically from a week ago when Lewenza had urged the automaker to “get serious” and table a proposal that followed the pattern set with agreements at Ford and GM.

Tensions had been particularly high because Chrysler CEO Sergio Marchionne had been vocal about his desire for substantial contract changes and his opposition to pattern bargaining with rivals Ford and General Motors.

Ultimately though, Lewenza said bargaining teams on both sides were able to reach common ground.

“We are satisfied that we have a reasonable deal,” he said. “We’re feeling good about the Chrysler deal, we’re feeling good about the GM deal, we’re feeling good about the Ford deal.”

Chrysler said it would not comment on the details of the agreement during the ratification process.

“We extend our appreciation to our Canadian workforce for their patience during this pivotal round of collective bargaining,” Al Iacobelli, vice-president of employee relations, said in a statement.

The CAW reached a tentative agreement with Ford on Sept. 17, just hours before a midnight strike deadline. Workers accepted the deal by a margin of 82 per cent. The union also reached an agreement with General Motors on Sept. 20, which is in the process of being voted on.

Industry observers had said those deals gave Chrysler little choice but to accept the framework agreement – Chrysler’s Canadian operations account for 25 per cent of its global production, the largest of the U.S. automakers.

The automaker had been concerned about being bound to the framework agreement that pays lump sum payments over four years in lieu of cost-of-living and wage increases.

Under the pattern deal first reached with Ford – and now established with GM and Chrysler – each worker will get $2,000 a year in the second, third and fourth years of the contract to cover cost-of-living increases, plus a $3,000 ratification bonus.

Long-term care provisions have also been capped at $800 per month for new hires and the prescription drug plan has been changed to reduce costs.

New hires at Ford, GM and Chrysler will also begin their careers at $20 an hour, down from $24, and take 10 years to reach peak pay levels of $34 an hour instead of the six years it currently takes.

New employees will also receive hybrid pension plans instead of pure defined benefit plans for current employees.

In the U.S., new workers start at US$15.50 per hour and rise to US$19.28 per hour compared with the US$28 per hour top rate paid to existing employees.

In the United States, Chrysler workers received lower lump sum payments than Ford and GM workers.

Chrysler initially didn’t want to follow the others because it presents itself as a smaller, different company.

“Chrysler was determined to have a different agreement,” said Lewenza. “But once you sit at the table and once you say…’everybody’s done except you,’ then maturity comes in, credibility comes in, integrity comes in.”

With the support of unionized workers, Lewenza said the automaker can expand as the market grows.

“We see Chrysler growing, we see momentum, we see customer confidence and when you put all those things together, why risk it,” he said.

Ratification meetings on the Chrysler deal will be held over the weekend.

— The Canadian Press

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