Tough round of Canadian auto talks set to start Tuesday

Mon Aug 13, 2012 10:23am EDT
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By Susan Taylor

TORONTO (Reuters) - Common ground looks elusive between the Canadian Auto Workers union and Big Three automakers in talks that start in Toronto on Tuesday, making compromise and creativity the key ingredients for success.

Participants expect negotiations on new three-year contracts to be the toughest in years.

Automakers want to cut labor costs that they say are the highest in the world. The union says workers who helped keep the companies afloat during the financial crisis should share the spoils of a return to profitability with higher wages.

"We will have to be a little bit more creative and innovative to come up with Canadian-appropriate solutions that are going to address the labor cost gap issue in a way that works for both the CAW and for the company," said a Ford official close to the negotiations.

"There probably won't be a silver bullet solution. We'll be looking at how we can address these wage issues, these health care issues, these pension issues, work rule issues, so that when we put all of those things together, the sum total of the solutions that we identify make some good progress against that labor cost gap."

CAW president Ken Lewenza has said wage cuts and two-tier pay structures are non-negotiable, although the union is under big pressure to accept performance pay and bonuses. But he agrees conditions have changed, and has hinted at flexibility on profit-sharing, a demand the union has rejected until now.

"I'm guarded at this particular time because the times are different," Lewenza told Reuters in March. "I want us to stick to the traditional way of compensating workers, with no gimmicks attached."

The CAW accepted a pay freeze in its last labor contract with the Big Three, which expires September 17. The contract dates from 2008, but was amended in 2009 during a North American auto sector meltdown that pushed GM and Chrysler into bankruptcy.   Continued...