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  • CAW National President Ken Lewenza speaks to reporters following a Canadian Auto Workers' news conference announcing the union will focus its talks with Ford as negotiations continue a day before a strike deadline between the union and the big three automakers in Toronto. The Associated Press/Michelle Siu

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September 18, 2012

CAW reaches deal with Ford, not GM or Chrysler

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TORONTO (AP) — The Canadian Auto Workers union said Monday it has reached a tentative deal with Ford, but a midnight strike deadline looms with Detroit's two other automakers.

CAW President Ken Lewenza said they expect Ford's four-year deal to serve as a template for GM and Chrysler and said if there is "light at end of the tunnel" they will extend the midnight deadline.

"If they say it is unacceptable we will have no choice to withdraw our labor," Lewenza said. "Don't force us to use that last tool."

The union earlier told its members it was optimistic strikes can be averted after the CAW decided to focus on talks with Ford who they say recognizes that the union won't accept a permanent two-tier wage structure. Ford emerged as most likely to reach an agreement ahead of a strike deadline looming Monday night.

Its current contracts with the U.S. automakers expire at midnight Monday.

The CAW represents about 21,000 auto workers in Canada and about 16 percent of auto production in North America. The CAW has about 4,500 workers at Ford, 8,000 workers at GM and another 8,000 at Chrysler.

The agreement averts a strike at Ford. It will see 800 laid off Ford employees get back to work, partially through the creation of 600 new jobs at its Canadian operations. There are no base wage increases during life of agreement, which lasts until Sept 2016, but each employee will receive a $2,000 lump sum payment which will cover cost of living increases, and a $3,000 ratification bonus.

Lewenza said it's a good deal in today's economic climate. He said Ford workers will vote on the deal this weekend. He said when the other Detroit automakers reached lead deals in the past the others followed the pattern.

Ford declined to provide specifics on the tentative deal because it hasn't been ratified by the workers.

"We believe that the tentative agreement offers unique-to-Canada solutions that will improve the competitiveness of the Canadian operations while providing employees the opportunity to earn a good living," Stacey Allerton, a Ford Motor Company of Canada vice president, said in a statement.

A spokeswoman for Chrysler said they are still reviewing the Ford deal and said they didn't have immediate comment. GM declined comment on the Ford deal but said their "efforts remain focused on working with the CAW to achieve an agreement that addresses the competitive needs of GM Canada".

If Chrysler refuses to go along with a Ford-CAW deal, that could mean trouble, says Art Schwartz, a former General Motors negotiator who now runs a labor consulting business in Ann Arbor, Michigan.

"I think the CAW is fully prepared to strike if they get a deal with one company and another decides to change it radically," he said.

Chrysler earlier took issue with the CAW focusing their efforts on Ford, saying Ford doesn't have as large a footprint in Canada as Chrysler and GM now does.

The auto companies say Canada is the most expensive place in the world to make cars and trucks, and they could move production south if the CAW doesn't cut costs. Wages are a key issue in the talks and the union is proposing that new employees earn less only when they are first hired and then take longer to reach the top end of the wage scale.

The automakers have been pushing for a permanent wage reduction for new employees, similar to a deal the companies reached in the U.S.

Canada's advantages in the past, a weaker Canadian dollar and government health care, have all but vanished. In addition, the United Auto Workers union in the U.S. has agreed to steeper concessions than the CAW, making U.S. labor costs cheaper.

The federal Canadian and Ontario province governments worked in tandem with the U.S. government on auto bailouts in 2009 to maintain Canada's share of North American auto production. Canada's share peaked at 3.2 million cars in 1999, about 17.4 percent of North American production. In 2011, Canada produced 2.1 million vehicles, or about 16 percent.

Ontario Premier Dalton McGuinty said Monday his government has every confidence that they will honor those agreements.

"I'm confident that people know what's at stake and they're going to find a way," he said.

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