November 8, 2010 / 3:53 PM / 7 years ago

Magna inks contract deal at Ontario seating plant

* Contract agreement ratified by 78.2 percent

* Freezes wages, but includes cost of living increase

* Plant supplies seats for Chrysler minivans

TORONTO, Nov 8 (Reuters) - Workers at a Magna International Inc MG.TO plant in southern Ontario voted in favor of a new contract agreement with the auto parts maker, preventing a strike that could have crippled production of Chrysler minivans in the province.

The Canadian Auto Workers union said on Monday that a two-year collective agreement was ratified by 78.2 percent of the membership on Sunday at the Integram Seating plant in Tecumseh, Ontario.

Over 700 workers at the plant, which makes seats for Chrysler minivans, assembled in nearby Windsor, Ontario, had voted overwhelmingly in favor of a strike if a deal had not been reached by Sunday at 11:59 p.m.

CAW Local 444 President Rick Laporte said that the new agreement keeps wages at current levels, but includes two lump sum bonuses for workers, as well as advances in post-retirement benefits.

He said the age that people qualify for the benefits has been reduced to 55 from 60, as long as they have spent at least 30 years at the company.

The deal also includes a cost of living agreement, which will see workers’ wages topped up in September 2012 to match the rise of inflation.

“It’s the first parts manufacturer that I‘m aware of that has any kind of cost of living agreement in place,” said Laporte. “To me that’s pretty historic.”

One of the key sticking points in negotiations had revolved around workers’ right to strike.

About three years ago, Magna founder Frank Stronach and then-CAW President Buzz Hargrove struck a deal called the Framework of Fairness Agreement (FFA), which made it easier for unions to organize at Magna’s plants in Canada, but in turn took away the right to strike.

The Integram plant organized long before the FFA came into place, but Magna wanted the agreement to be included in any deal reached in the latest round of negotiations, Laporte said.

He said that he came out of the talks with a side letter saying the FFA will not be instituted during the life of the collective agreement, which expires on Nov. 11, 2012. (Reporting by John McCrank; editing by Rob Wilson)

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