September 1, 2016 / 6:07 PM / in a year

Canada auto union faces pension pressure from single plant deal

General Motors auto workers prepare rows of the new Chevrolet Camaro for delivery, at the company's Oshawa Ontario facility April 8, 2009. REUTERS/Fred Thornhill/File Photo

TORONTO (Reuters) - Canada’s autoworkers’ union will face additional pressure to accept less generous retirement benefits for new hires in contract talks due to a 2013 deal signed by workers at one General Motors Co plant, according to a top union official.

Canada’s Unifor union and GM, Ford and Fiat Chrysler kicked off bargaining last month for new contracts for assembly workers. Talks will shift into high gear on Tuesday as the union picks its first strike target.

Under pattern bargaining, the union chooses one company for intensive negotiations. The other two automakers are then expected to agree to broadly similar contracts.

The contracts exclude GM’s CAMI plant in Ingersoll, Ontario, which has a separate agreement on a different schedule. In 2013, its workers agreed to a deal that included defined contribution (DC) pensions for new hires.

Unifor, which represents more than 20,000 autoworkers, has fought hard to hold on to more generous defined benefit pensions plans, which ensure retired workers receive a set income. But GM is likely to push for a similar concession in these talks.

“It’s a problem,” Unifor National President Jerry Dias said in an interview. “CAMI going to a straight DC plan for new starts was a real breakaway from the master Detroit Three negotiations ... Does that help our situation in this set of negotiations? The answer is no.”

Unifor has said winning new investment is its top priority in talks. GM’s Oshawa assembly plant, with about 2,500 hourly workers, is the biggest issue, at risk of closure if it does not win new product commitments.

On Sunday, its members voted for a strike mandate, meaning workers are in a position to walk off the job if the parties cannot come to terms. The union’s current four-year contract with automakers expires on Sept. 19.

In 2012, when the autoworkers last negotiated the main contracts, Unifor was under pressure to give up defined benefit pensions. It agreed to a hybrid plan for new hires, with defined benefit and defined contribution portions.

But GM has long said that it does not plan to hire new permanent employees under the hybrid plan in Oshawa, a company source said. It will rely on temporary workers to fill shortages unless the plant switches to a plan that more closely resembles CAMI‘s, the source said.

The situation means union leaders will have to balance the interests of Oshawa workers against peers at Ford and Fiat Chrysler.

“The union would feel a strong push from its membership at the other two Detroit Three producers to stick to defined benefit,” said John Holmes, a professor emeritus at Queen’s University who has studied the industry.

Reporting by Allison Martell and Susan Taylor; Editing by Jeffrey Hodgson and Alan Crosby

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