September 26, 2012 / 1:28 PM / 6 years ago

CAW chief says Chrysler contract deal possible Wednesday

TORONTO (Reuters) - Canada’s auto workers could seal a new labor agreement with Chrysler Group LLC on Wednesday night, union President Ken Lewenza said, in a huge shift in the tone of the drawn-out negotiations.

Ken Lewenza, national president of CAW (Canadian Auto Workers), discusses contract negotiations with General Motors following a meeting between the two, in Toronto, August 14, 2012 REUTERS/Brett Gundlock

Fiat SpA’s Chrysler, the last of the Detroit Three automakers without a new contract in Canada, submitted a written proposal to the Canadian Auto Workers (CAW) union on Tuesday night that reignited what have been difficult talks, Lewenza said.

“I absolutely think it’s possible,” to reach a deal on Wednesday, Lewenza told Reuters after a morning meeting with the CAW’s Chrysler negotiating team. “There’s still some very, very minor issues around the pattern that have to be dealt with. We’re going to keep working at it over the course of the day.”

Ford Motor Co workers ratified a contract deal with the CAW at the weekend, while General Motors Co employees vote on Wednesday and Thursday.

“We are making good progress,” said Todd Bested, head of labor relations for Chrysler Canada. “Chrysler did present an offer to the CAW, however I can’t comment on the specifics of the discussions.”

Chrysler has more than 8,000 unionized workers in Canada. Its Windsor, Ontario, assembly plant is the sole source for the company’s minivans in North America, and its Brampton, Ontario, plant produces sedans. The company also has a casting plant in Toronto.

Chrysler’s Local 444 union, which represents workers at the Windsor plant, announced an information and ratification meeting for September 30 on it website.

Lewenza declined to say how the two sides would resolve a Chrysler demand to eliminate a cost of living increase and adjust lump sum payments. They are key elements in the deals with Ford and GM.

“It’s too sensitive right now,” Lewenza said. “The fact of the matter is one little miscommunication could stop the momentum and I’m not prepared to do that.”

Lewenza was in Oshawa, Ontario, on Wednesday as CAW workers vote on their deal with GM, but he said he would stay in touch with Chrysler throughout the day and meet with the company in Toronto at 6:30 p.m. (2230 GMT).

The CAW reached an agreement with Ford on September 17, and used that deal to set the pattern for deals with GM and Chrysler in an effort to ensure that no company has a labor cost advantage over its rivals.

Chrysler has argued that, as the smallest and most vulnerable of the Detroit Three, it cannot afford Ford’s framework deal and wanted to eliminate any increase in fixed costs, Lewenza has said. It also wanted flexibility on the timing and structure of lump sum bonus payments that total C$9,000 ($9,100), including a C$3,000 ratification bonus.

The CAW, which represents more than 20,000 workers at the Canadian plants of the three automakers, has a deal with Ford and GM that freezes wages until June 2016, when a cost of living increase will be introduced.

The agreement also starts new workers at 60 percent of the highest hourly rate of C$33.85, down from 70 percent in the last contract. It will take 10 years to reach the top of the pay scale, up from six years.

The CAW insisted that new employees eventually reach the top pay scale, in contrast to their U.S. counterparts at the United Auto Workers, who have a permanent two-tier wage structure.

New employees will also contribute more money to a pension plan that mixes elements of a defined benefit and defined contribution plan. A defined benefit plan for current employees is unchanged.

Editing by Peter Galloway

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