August 10, 2016 / 6:57 PM / a year ago

Union wants higher pay as Canadian auto talks begin

3 Min Read

TORONTO/MONTREAL, Aug 10 (Reuters) - The union representing most Canadian autoworkers wants a more substantial pay raise for its members after years of small increases, as contract talks start this week with three major automakers.

"We're clearly looking to make some improvements," said Unifor President Jerry Dias in a telephone interview before his first meeting with General Motors Co on Wednesday.

Unifor, the country's largest private-sector union, will not make specific demands on salaries and pensions this week, Dias said.

The talks will cover about 20,000 Canadian autoworkers at GM, Fiat Chrysler Automobiles and Ford Motor Co. The union's four-year contract expires Sept. 19, putting the two sides in a position to strike or lock out workers.

Dias said the talks, which he called some of the most important in a generation for Canadian automaking, will not lead to a deal without production of a new vehicle model in Canada, which has lost jobs to places with lower-cost labor such as the United States and Mexico.

Ford has said it pays hourly employees an average of C$30 in Canada, C$28 in the United States and C$5 in Mexico.

GM's Oshawa plant in Ontario may shut down one of its two assembly lines, with several vehicles already produced elsewhere or expected to move in 2017.

GM Canada has said the negotiations are separate from the carmaker's future investments in Canada because labor is not the only cost it considers when deciding where to make new products.

"GM won't make any future product decisions for Oshawa Assembly until after these negotiations," said Steve Carlisle, president of GM Canada.

One challenge for Unifor in securing new vehicles for Oshawa is that GM already "locked up product" during a 2015 agreement between the three automakers and the United Auto Workers union in the United States, said Arthur Schwartz, president of Labor and Economics Associates, a consultancy.

Unifor will likely suggest which vehicles could be built at the Oshawa plant, Schwartz said. "But if the idea is to bring a vehicle out of a UAW plant, that's going to be difficult."

Schwartz, a former GM negotiator, said the automaker could ask Unifor for similar terms reached with the union during a 2013 contract for its CAMI automotive plant in Ingersoll, Ontario. That deal gives GM more flexibility, including the ability to hire new employees with a defined contribution pension, which is less costly than the defined benefit package for workers in Oshawa. (Reporting by Allison Martell in Toronto and Allison Lampert in Montreal; Editing by Phil Berlowitz)

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