Canadian union reaches GM, Chrysler deals

Canada’s auto union avoids a two-tier wage system.

TORONTO (AP) — The Canadian Auto Workers union tentatively agreed Thursday to labor deals with General Motors Corp. and Chrysler LLC that would replace contracts expiring in September.

CAW President Buzz Hargrove said the deals keep the automakers’ labor costs essentially the same as they are now. A deal with Ford Motor Co. last month also kept the company’s labor costs essentially the same, the union said.

Hargrove said the agreements prevent a two-tier wage system used in the U.S. where new hires would be paid about half the hourly wages of older employees. The deals also freeze wages.

The CAW also received a commitment from GM on investments to produce new vehicles at a plant in Oshawa, Ontario, a key demand.

The Chrysler agreement reflected many of the basics already included in the other deals.

Al Iacobelli, a Chrysler vice president, said the company is pleased to have a tentative agreement with its 9,600 CAW employees.

“We believe this agreement recognizes the contributions of our CAW work force, while helping contribute to Chrysler Canada’s overall competitiveness,” Iacobelli said in a statement.

GM and Chrysler declined to comment on the details of the agreements until the ratification process is done.

Hargrove said the membership will vote on the new GM deal today and the new Chrysler deal Saturday.

“This is a good agreement. It protects as many jobs as we could,” Hargrove said. “This truly is a win-win in a difficult time.”

The current contracts cover about 22,000 GM and Chrysler workers.

The contracts do not include what the automakers got from the United Auto Workers in the U.S. last fall — a lower-tier wage for new hires of around $14 per hour, about half that of a current UAW production worker.

Industry analysts have said Ford settled early to avoid a strike at its Oakville, Ontario, factory, which makes the strong-selling Ford Edge and Lincoln MKX crossover vehicles that are important to Ford’s cash flow.

Ken Lewenza, head of CAW’s Chrysler bargaining team, called negotiations tough late Wednesday.

“We’re not dealing with companies that have a lot of cash here. We’re dealing with companies that are in market decline,” Lewenza said.

GM recently announced the closure of a plant in Windsor, Ontario. About 1,400 workers will lose their jobs. GM also recently announced 900 job losses at a plant in Oshawa, Ontario.

Ontario Premier Dalton McGuinty said he is prepared to give automakers more taxpayers’ money for new projects, despite the layoffs.