TORONTO (Reuters) - The Canadian Auto Workers union said on Wednesday that stalled labor talks with Chrysler will resume on Monday and that Fiat SpA’s chief executive, who has been critical of the union, would be invited to the table.
Chrysler has until the end of the month to forge an alliance with Fiat to qualify for long-term U.S. and Canadian government aid. The Italian automaker has said such a deal hinges on Chrysler securing concessions from its unions in Canada and the United States.
Fiat’s chief executive, Sergio Marchionne, said in an interview with the Globe and Mail newspaper on Wednesday that a deal on the partnership had only a 50-50 chance of succeeding because of a lack of progress in talks between the floundering Detroit automaker and union leaders.
Marchionne, who holds dual Italian and Canadian citizenship, said the unions would have to agree to match the lower labor costs of plants run by Japanese and German automakers in the United States and Canada, adding that Canadian unions were especially resistant to the idea.
CAW President Ken Lewenza told reporters on Monday that he was surprised to read Marchionne’s comments.
Lewenza said negotiations between the union and Chrysler, which have been stalled since the beginning of the month, would resume next week, and that Marchionne would be welcome to join them.
“We are going to bargaining on Monday,” he said. “I can tell you that I will personally invite Sergio, if in fact he’s the guy now calling the shots at (Chrysler), to listen to our bargaining committee and listen to the excellent reasons to invest in Canada.”
Lewenza said that the cost of labor by the union’s members added up to a total of 7 percent of the cost of a new vehicle.
“Nobody with a rational mind could suggest that 7 percent labor costs for the total manufacturing of a vehicle is going to make or break this deal when we’re talking about billions of dollars of outstanding issues that have to be resolved in the United States with bondholders, private investors, (and) Daimler.”
The CAW said it has been waiting for Chrysler to work things out with Fiat before moving forward with negotiations.
“Our last conversation with the company at the table, we kind of put everything on hold until they could go back and work things out with Fiat and the UAW (United Auto Workers union in the United States),” said Rick LaPorte, president of CAW Local 444 in Windsor, Ontario, and chairman of the CAW-Chrysler master bargaining committee.
A spokeswoman for Chrysler said the company had no comment.
LaPorte said he assumed that the Fiat deal was all but done, with the exception of the labor contracts, and that the union was looking to restart negotiations on Monday.
“It is also my understanding that the UAW may be close to an agreement there as well, so it will be interesting to see what comes out of that agreement and I‘m hoping that that gets wrapped up before we start discussions,” he said, adding that he had not talked to the UAW himself.
Chrysler has so far received C$1 billion ($826 million) from the Canadian government and $4 billion from Washington in bridge loans.
The company has requested an additional C$3 billion in Canada and would be eligible for at least $6 billion in extra U.S. government funding if it comes up with a deal with Fiat and an acceptable restructuring plan.
Chrysler has about 9,400 workers in Canada, 8,000 of whom are represented by the CAW.
Reporting by John McCrank; editing by Rob Wilson