September 14, 2012 / 8:03 PM / in 5 years

Canada auto workers, Detroit 3 still miles apart

OSHAWA, Ontario/DETROIT (Reuters) - Just three days before a strike deadline, the Canadian Auto Workers and the three Detroit automakers were far apart on major contract issues, with Chrysler Group’s CEO telling workers to temper their expectations and plant organizers preparing for a walk-out.

Negotiations with Fiat SpA’s Chrysler Group LLC FIA.MI, General Motors Co (GM.N) and Ford Motor Co (F.N) have intensified, the CAW said, but little progress had been made by Friday afternoon.

“The reality is that we are still miles apart. They really haven’t moved although we have had a little bit more dialogue on particular issues,” said Dino Chiodo, president of CAW Local 444, the union at Chrysler’s Windsor, Ontario, assembly plant.

“We have our challenges ahead of us, that is no question,” he said.

Talks are taking place around the clock at a hotel in downtown Toronto as time ticks down to the union’s strike deadline of 11:59 p.m. EDT on Monday (0359 GMT, Tuesday).

The CAW, which represents some 20,000 workers at the Detroit Three, has threatened an unprecedented simultaneous strike at all three automakers if it fails to reach a contract agreement with at least one of them before the deadline.

Earlier on Friday, Chrysler CEO Sergio Marchionne warned union negotiators that they couldn’t keep ignoring the “facts” as that was not going to “make anybody’s life better”.

Marchionne did not provide details, but in the past he has said that manufacturing costs in Canada, which he calls the highest in the world, must be addressed in the current contract talks.

“My sincere hope is that we all come to the stark realization of where we are and then we move it on from here,” he told reporters at a United Way of Southeastern Michigan news conference. Marchionne is the chairman of that charity group.

He added that some progress has been made in the talks but that there is a “long road to travel between now and conclusion”.

Ford and GM did not respond to a request for comment.

CONCESSIONS

On Thursday, the CAW offered Chrysler, General Motors and Ford concessions on wages and pensions for new hires, yielding ground that might not overly upset current union members who must ratify any contract agreement.

“We are asking obviously for investment, job security and product allocation for that,” Chiodo said.

Negotiators are pushing for commitments to GM’s Oshawa, Ontario, operations and Ford’s Windsor engine plant, as well as a new paint shop at Chrysler’s Brampton, Ontario, facility, the Globe and Mail newspaper reported, citing an unnamed senior union source.

The union said it was waiting on Friday for a response from the automakers.

“We have put forward a proposal that the companies ought to look at objectively rather than try to force a pre-conceived idea of their view of the solution down our throats,” CAW Secretary-Treasurer Peter Kennedy said in an interview.

“I understand Mr. Marchionne’s role and what his responsibilities are,” Kennedy said. “I‘m sure, if he were to be honest and candid, he understands that we are in a process here to get a deal that will protect our members and not damage the company.”

The concessions proposed by the CAW include allowing for new hires to start at lower wages than the around C$24($24.78) an hour they currently get and to be paid less than current workers for a longer period of time.

This is the so-called “two-tier” wage scale that the three Detroit automakers and the United Auto Workers in the United States have used for the past several years to bring labor costs closer to those of foreign automakers.

The CAW is adamant that new workers must over time reach the same pay-scales as existing workers. It may be willing to extend its “earn-in,” the time it takes new hires to reach the highest end of the pay scale, from six to as many as 10 years, a union source close to the talks told Reuters earlier this week.

CAW PREPARES TO STRIKE

On Friday afternoon, GM assembly line worker Peter Johnston was at the CAW’s Oshawa, Ontario, offices, preparing for a strike. The local has thousands of picket signs stockpiled, and portable washrooms, and barrels on order for use at GM’s Oshawa assembly plant.

Johnston, a 32-year veteran, works on the consolidated line at the Oshawa plant. GM has said it will shut down the line next summer, putting as many as 2,000 workers, nearly a quarter of GM’s unionized Canadian employees, out of work.

“I‘m like everybody else, the uncertainty rides on me. I fear for the future of the workers at General Motors, and the municipality around here,” he said.

($1 = 0.9685 Canadian dollars)

Additional reporting by Euan Rocha in Toronto; Writing by Nicole Mordant in Vancouver and Bernie Woodall in Detroit.; Editing by Peter Galloway and Frank McGurty

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