September 24, 2012 / 3:53 PM / in 5 years

Chrysler deal seen within days: CAW president

TORONTO (Reuters) - The Canadian Auto Workers said on Monday it was working to resolve Chrysler’s concerns that contracts the union reached with the other two Detroit automakers were too expensive, but it could still take four to five days to reach a deal.

A Chrysler badge is pictured on a new car at a dealership in Vienna, Virginia April 26, 2012. REUTERS/Kevin Lamarque

Fiat SpA’s FIA.MI Chrysler Group LLC, which resumed formal talks on Monday after low-level discussions over the weekend, is the only Detroit Three automaker without a labor agreement in Canada. The CAW negotiated four-year deals with Ford Motor Co (F.N) and General Motors Co (GM.N) last week.

“They know that nobody’s next,” CAW President Ken Lewenza said in an interview with Reuters. “I’d be really disappointed if we didn’t get this done in four or five days max.”

Chrysler has yet to present the union with a formal economic proposal, Lewenza said, and won’t do that until various sub-committees have resolved more issues that affect costs.

The gap on sub-committee issues is not significant, but the two sides remain far apart in overall talks, he said. “On a scale of one to 10, we’re at about a six,” Lewenza said.

In a leaflet distributed to workers on Monday morning, the union said the Ford ratification and GM’s tentative agreement put it in “a much stronger position” with Chrysler.

On Sunday, 82 percent of Ford’s unionized workers ratified that company’s deal and GM employees will vote Wednesday and Thursday on the GM pact.

“We continue to meet with and talk to the CAW with the hopes of reaching an agreement,” said Chrysler spokeswoman Jodi Tinson.

Chrysler has been the most vocal in saying that the cost of making vehicles in Canada is too high, and told the union last week that the Ford deal was too expensive. As an example, Lewenza said Chrysler wants to break a C$3,000 ($3,100) signing bonus into smaller installments.

The CAW, which represents more than 20,000 workers at the Detroit Three in Canada, reached a deal with Ford first, setting a pattern for the other two companies. Pattern bargaining is a union strategy meant to ensure that no company has a labor cost advantage over the others.

It is difficult to predict how long it will take to resolve the issues with Chrysler, said CAW National Secretary-Treasurer Peter Kennedy.

“Chrysler’s indicated that some of the financial elements, the compensation package, is a little steep for them, but there’s ways of working around that and spreading it out, as long as at the end of the day it amounts to the same thing,” he said. “Until we see something specific, it’s all speculation.”

The CAW’s pattern deal includes lump sum bonuses for workers, but has no cost of living increases for the first three years of the contract.

New hires will start at a lower wage, earning 60 percent of the highest hourly rate of C$33.85, down from 70 percent previously. It will also take them 10 years to reach the top of the scale, up from six years.

New employees will also have a hybrid pension plan, that mixes a defined benefit and defined contribution plan. The defined contribution plan for current employees was unchanged.

($1=$0.98 Canadian)

Additional reporting by Allison Martell; Editing by Frank McGurty

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