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Canadian Auto Workers Union Finishes Detroit’s Big 3 Pacts Four Months Early

May 16, 2008
Related Topics: Labor Relations, Workforce Planning, Latest News
The Canadian Auto Workers pulled off a double-whammy deal Thursday, May 15, reaching tentative agreements with General Motors and Chrysler four months before each of the contracts with the two automakers and the union were to expire.

The agreement preserves shifts and keeps open plants that the automakers had planned to close. The pact also offers buyouts for all union-represented GM workers at a Windsor, Ontario, transmission plant scheduled to close in 2010.

In a noon conference call with reporters, CAW president Buzz Hargrove said labor costs would stay essentially the same for the automakers under the agreements, which are pending ratification by union membership.

“For the first time in my life and in my bargaining career, I can truly say that this was a win-win,” Hargrove said. “I never like that term. I’ve always said that it’s the workers that win.”

Hargrove said the union also avoided an internal fight about excluding a two-tier wage system Detroit’s Big 3 auto firms have instituted in their U.S. factories.

Union workers are voting to ratify the agreement with GM on Friday, May 16. A Chrysler vote will follow Saturday, May 17.

The votes closely trail a now-ratified three-year deal with Ford Motor Co. The union ratified the Ford agreement on May 4.

“We’re comfortable going to our membership and are very confident about ratification,” Hargrove said.

The union typically aims for a 90 percent vote in favor of ratification, Hargrove said. The vote to ratify the agreement with Ford missed that by a long shot. While just over two-thirds of the membership voted in favor of the Ford agreement, Hargrove suspected that the mentality of members was to vote no if they were unsure.

Workers may have thought that with so much time between now and the September expiration of the current contracts, the union could only get more, Hargrove said. He would not say how he expected the vote to turn out for GM and Chrysler.

The three-year potential contracts with the two automakers affect more than 24,000 Canadian autoworkers: GM employs about 15,000 CAW members and Chrysler about 9,600.

The CAW had faced pressure from a Canadian manufacturing base that has been hit by the economic downturn in the United States—the main market for Canadian exports—and a 60 percent gain in the Canadian dollar since 2002.

Part of the CAW deal with GM will include as much as $125,000 Canadian ($125,450 U.S.) to buy out each of the 1,300 union-represented workers at the Windsor transmission plant.

The amount each worker gets will depend on age and seniority, but a vast majority will get a full pension, and others will get a reduced benefit, Hargrove said.

On Monday, May 12, GM said it planned to close that 45-year-old plant. Hargrove said the decision came as a shock, although union leaders have also said they think dwindling market share left GM with no other choice.

GM produces the Chevrolet Silverado and GMC Sierra trucks and the Buick Lacrosse and Chevrolet Impala sedans at its two Oshawa, Ontario, assembly plants.

Hargrove said the union reached an agreement to extend production at the Oshawa car plant until 2012, two years longer than GM had planned. The plant employs more than 3,000 workers.

The Oshawa truck plant, where GM planned to eliminate two shifts by September, will be open until September 2009. Hargrove said the union was able to win that extension largely because of hybrid versions of the Silverado and Sierra that are scheduled to launch during the life of the contract.

The Oshawa car plant, which will produce the Chevy Camaro, will remain open and also produce a new vehicle on the same platform, Hargrove said. GM has not identified what vehicle that will be.

“Oshawa comes out of this overall with a great victory,” Hargrove said.

Hargrove said Chrysler told union negotiators that the Windsor assembly plant would remain its main North American production hub for minivans, keeping three shifts of union workers employed there if demand continues.

Chrysler also committed to continued production at its Brampton, Ontario, assembly plant. The plant will produce the new Chrysler 300C launching in 2010.

In addition, he said Chrysler had agreed to keep open until mid-2011 a money-losing casting plant near Toronto that employs 350 union workers and to seek a buyer or joint-venture partner for the factory after that.

Al Iacobelli, Chrysler’s vice president for union relations, said in a statement, “Chrysler is committed to being among the industry’s best in productivity, quality, customer value and service. With this agreement, our Canadian operations will support that commitment by producing some of our most iconic vehicles, including the Chrysler and Dodge minivans, and the all-new Dodge Challenger.”

Filed by Craig Trudell of Automotive News, a sister publication of Workforce Management. To comment, e-mail

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