With 25 minutes to go to last night's 11.59pm strike deadline, DaimlerChrysler's Canadian operations and the Canadian Auto Workers union (CAW) agreed a deal that will see a new vehicle built in Windsor, Ontario, from 2005.

DC and the CAW reached a tentative agreement covering about 13,000 employees for three years.

In a statement issued shortly afterwards, DaimlerChrysler Canada said it had agreed with the CAW the framework of a tentative contract that would bring new investment to the Windsor, Ontario, area from 2005 while addressing other key issues raised during 2002 collective bargaining.

The economic offer is based on the pattern agreement reached with General Motors Canada and subsequently adopted by Ford Canada, DC said.

The three companies agreed new contracts that include wage increases of 3% in each of the first two years and 2% in the third, as well as improved benefits, such as increased paid holiday, and substantial new investments in Canada.
DaimlerChrysler Canada chief Ed Brust said that the agreement would create "significant new employment in the Windsor area some time toward the end of 2005".

The move could create as many as 2,500 to 3,000 jobs, CAW officials told the Detroit News.

"It's an incredible accomplishment for our union," CAW President Basil "Buzz" Hargrove told the newspaper. "This has been the toughest round of talks since the early 1980s when Chrysler nearly went bankrupt."

DaimlerChrysler also said an additional 660 jobs would be created next year in conjunction with the launch of the 2003 Chrysler Pacifica and model changes to current minivans at the Windsor assembly plant which would "minimise the effect on employees" due to the phasing out of Dodge Ram van production at the Pillette (Ontario) assembly plant at the end of 2003.

The tentative agreement must now be ratified by the CAW membership in a vote on Sunday.

DaimlerChrysler Canada human resources manager Phil Bezaire said: "Over the three years of this contract, we will invest $C2.6 billion in our Canadian operations, excluding the new Windsor investment."

DaimlerChrysler's current operations in Canada include two assembly plants in Windsor and one in Brampton, Ontario, plus an aluminium castings facility in Toronto and an interior trim factory in Ajax, Ontario.

Brampton is the sole factory building Dodge Intrepid, Concorde and Chrysler 300M saloons for the North American market while the components facilities also ship to DC assembly plants across the border in the United States as well as Canada.

The future of the Pillette Road plant in Windsor, which makes Dodge Ram vans, was the biggest point of contention in this latest round of negotiations with the union.

During the last contract talks in 1999, DaimlerChrysler promised to re-equip the plant for a new model after Ram production ended in 2003 but then said early last year that, due to its restructuring, there would be no new vehicle for the 1,200 plant workers to build.

DC also proposed changes to longstanding work practices which the union membership did not want.

The CAW has previously complained that its members were taking more than their fair share of job losses under DaimlerChrysler's North American restructuring plan.

As a strike seemed likely yesterday, until last night's breakthrough, it emerged that DC did not seem unduly worried about the strike that CAW president Basil 'Buzz' Hargrove had seen as inevitable before a deal could be reached.

DC had scheduled temporary shut-downs of between one and seven weeks at all three of its Canadian assembly plants between now Christmas, suggesting that it had plenty of vehicle stocks and few concerns about the short-term effects of a strike.

Speaking to the New York Times, Jeff Schuster, director of North American forecasting at JD Power & Associates in Detroit, said a lengthy strike could threaten production of the new Pacifica. "They wouldn't want to jeopardise the launch of that vehicle," Schuster told the newspaper.