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 chief executive telling workers to temper their expectations and plant organizers preparing for a walkout.
Talks between the union and Fiat SpA’s Chrysler Group LLC FIA.MI, General Motors Co (GM.N) and Ford Motor Co (F.N) continued around the clock as time ticked down to the union’s strike deadline of 11:59 p.m. EDT on Monday (0359 GMT, Tuesday).
CAW National President Ken Lewenza said the companies had rejected the union’s proposed concessions on wages for new hires, insisting on permanently lower wages for new employees, something Lewenza called a “no-go.”
“We can be flexible on wage progression,” said Lewenza in an interview with Reuters. “But it can’t be a long-term, permanent two-tier system, and they reject that outright.”
The CAW had proposed cutting starting wages below the roughly C$24 ($25) an hour currently offered and extending the “earn-in,” the time it takes new employees to reach the top of the pay scale.
The Detroit automakers and the United Auto Workers in the United States have used a two-tier wage scale for the past several years to bring labor costs closer to those of foreign automakers. But the CAW is adamant that unlike UAW members, its new workers eventually reach the same pay as existing employees.
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.
Lewenza said he is frustrated but still “hopeful” that he will have a deal by the deadline.
Chrysler declined to comment on Lewenza’s comments, and Ford and GM could not immediately be reached on Friday evening.
Earlier on Friday, Chrysler CEO Sergio Marchionne warned union negotiators that they couldn’t keep ignoring the “facts” since 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 said there is a “long road to travel between now and conclusion.”
Lewenza said the union proposed temporarily freezing workers’ cost of living allowance, an annual wage increase, in exchange for a lump-sum payment. But he said the companies want to eliminate the cost of living allowance altogether.
He also said he is willing to be flexible on pensions for new employees. Asked whether he would consider anything other than a defined benefit pension plan, he said: “I think we have a responsibility to be flexible.”
Defined benefit plans are typically paid for by companies and are becoming rarer as employers struggle to fund yawning pension shortfalls and look to switch employees to self-funded defined contribution plans.
But when it comes to making compromises, said Dino Chiodo, chair of the CAW’s Chrysler master bargaining committee, the union is looking for something in return.
“We are asking obviously for investment, job security and product allocation for that,” he said.
Negotiators are pushing for investments in GM’s Oshawa 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.
On Friday afternoon, GM assembly line worker Peter Johnston was at the CAW’s Oshawa offices, preparing for a strike. The local has thousands of picket signs stockpiled, and portable washrooms 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.
Additional reporting by Euan Rocha in Toronto; writing by Nicole Mordant in Vancouver and Bernie Woodall in Detroit; editing by Peter Galloway, Frank McGurty and Prudence Crowther