Canadian Auto Workers (CAW) president Ken Lewenza has warned automakers to stop asking for concessions as the first contract talks in four years got under way.
Canada’s 24,000 autoworkers deserve to share in the gains the automakers have made since 2009 when a multi-million dollar government bailout and worker concessions helped keep a struggling industry in business, he said, according to the Toronto Star.
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“The companies have profited because of our members’ sacrifices. They have no economic or ethical right to demand further concessions,” Lewenza told a news conference in Toronto.
The report said the CAW is holding its first formal meetings this week with each of the Detroit Three – General Motors, Chrysler and Ford – in what some have described as the most crucial auto talks in years.
At stake are the wages of some of the country’s highest-paid industrial workers, along with the future of auto industry investment in Canada, a key driver of the province of Ontario’s economy.
Lewenza said GM Canada had opened the talks this week by saying it wants to cut its hourly labour costs in Canada.
While the company has yet to make specific proposals, Lewenza said, “they made multiple demands in multiple areas that we would consider concessionary.”
GM’s US chief executive Dan Ackerson has described Canada as the most expensive place in the world to build cars.
The automaker’s Canadian unit recently announced plans to close an older assembly line in Oshawa and move some of that production (including a longtime Oshawa plant staple, the Impala) to a lower cost facility in the US, the first time in years the big Chevy sedan has been built south of the border – this time in Detroit-Hamtramck. Some Impala production will remain in Ontario but at the newer flex plant next door to the one planned to close.
The company declined to comment to the Star on its demands, saying only that “the North American auto industry today faces extremely challenging competitive conditions.”
Ford of Canada will also be seeking more “overall labour cost competitiveness” both to protect its existing investment in Canada and also win new business, an official close to the talks told the paper.
Lewenza said Canada’s higher pay rates are offset by the higher profits the automakers earn on vehicle sales here. The cost of living in Canada is higher, and the Canadian dollar is overvalued by 20% relative to the US dollar, a problem that can’t be solved in labour negotiations, he said.
He added the union wants to work with the automakers to make Canada’s plants among the world’s most productive. But it can’t go back to its membership seeking more concessions, not when the companies have returned to profitability.
He told the conference his members want to win back extras like the Christmas bonus they gave up in 2009 to help GM and Chrysler avert bankruptcy. The union also gave up several dollars per hour in pay, agreed to a four-year wage freeze, and lost bonuses and time off while retirees gave up pension indexing.
While he said he doesn’t expect to regain all of the losses, the union can’t agree to any further concessions given the companies are now profitable.
“One way or another our members have to make some progress,” he said. He added the union would not agree to a US-style two-tier wage system that would see new recruits accept a lower pay scale.
Lewenza said it was too soon to say which automaker the union will pick to negotiate a master agreement, which becomes the blueprint for the other companies.
The target last time, in 2008, was Ford. Ford is also looking at improving its overall labour-cost competitiveness in Canada, a senior official told the Toronto Star.
Lewenza said he’s hoping to have a deal in place before the current contract expires on 17 September. Bargaining will resume after the CAW’s constitutional and collective bargaining conference ends on 24 August.
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