About 24,000 General Motors and Chrysler workers in Canada will be voting today (16 May) and tomorrow to ratify the new labour agreements tentatively agreed yesterday between their employers and the  Canadian Auto Workers (CAW) union to replace contracts expiring next September.

CAW president Buzz Hargrove told the Associated Press (AP) the deals keep the automakers’ labour costs essentially the same as now. The union added that a deal agreed with Ford last month (and ratified by workers on 4 May) also kept the company’s labour costs essentially the same as at present.

Hargrove told AP the agreements prevent a two-tier wage system like that agreed last year between automakers and the United Auto Workers (UAW) union in the US where new workers would be paid about half the hourly wages of current employees. That deal 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 AP report added.

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

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“This is a good agreement. It protects as many jobs as we could,” Hargrove told the news agency. “This truly is a win win in a difficult time.”

The Associated Press said the current contracts cover about 22,000 GM and Chrysler workers.

The news agency noted that 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 its cash flow.

The pact also offers buyouts for all union-represented GM workers at the Windsor, Ontario, transmission plant scheduled to close in 2010, Automotive News (AN) reported.

Part of the CAW deal with GM will include as much as C$125,000 to buy out each of the 1,300 union-represented workers at the plant.

The amount each worker gets will depend on age and seniority, but a vast majority will get a full pension, and others will get a reduced benefit, Hargrove told Automotive News.

He added that the union had also reached an agreement to extend production at the Oshawa, Ontario, car plant until 2012, two years longer than GM had planned. That plant employs over 3,000.

The Oshawa truck plant, where GM planned to eliminate two shifts by September, will be open until September 2009. Hargrove told Automotive News the union was able to win that extension largely because of hybrid versions of the Silverado and Sierra that are scheduled to launch during the life of the contract.

Hargrove also said Chrysler has promised its Windsor assembly plant would remain its main North American production hub for minivans, keeping three shifts of union workers employed there if demand continues and had committed to continued production at its Brampton, Ontario, assembly plant which will produce the redesigned Chrysler 300C from 2010.

In addition, he told Automotive News, Chrysler had agreed to keep open until mid-2011 a money-losing casting plant near Toronto that employs 350 union members and to seek a buyer or joint-venture partner for the factory after that.

Chrysler’s head of union relations, Al Iacobelli, said in a statement last night:  “The company is pleased to have reached a tentative agreement with the Canadian Auto Workers (CAW) Chrysler Canada bargaining team. We believe this agreement recognises the contributions of our CAW workforce, while helping contribute to Chrysler Canada’s overall competitiveness.

“Chrysler is committed to being among the industry’s best in productivity, quality, customer value and service. With this agreement, our Canadian operations will support that commitment by producing some of our most iconic vehicles, including the Chrysler and Dodge Minivans and the all-new Dodge Challenger.”

Chrysler said the tentative agreement covers about 9,600 of its Canadian workers, primarily in Brampton, Etobicoke and Windsor.