Magna International chairman Frank Stronach has signed a ground-breaking deal with the Canadian Auto Workers (CAW) union that opens up the company’s Canadian plants to union representation in return for the union agreeing not to go on strike at any plants that are organised, writes a just-auto North American correspondent.
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The seismic shift in Stronach’s attitude has resulted in an agreement called the Framework of Fairness, which is the product of two years of negotiations that started when the Magna chief called CAW head Buzz Hargrove to discuss ways of ending the adversarial relationship between the auto parts giant and the union.
“The traditional, confrontational model of labour relations is unproductive and wastes energy that would be better focused on creating the conditions which would be fair to employees and would ensure that Magna remains competitive in the global automotive industry,” Stronach said as he and Hargrove unveiled the pact.
The document was signed at Magna’s opulent headquarters in Aurora, just north of Toronto, where Hargrove sat between Stronach and Magna co-chief executive officer Don Walker at a table ringed by senior Magna and CAW officials.
Stronach said he has come to believe that the CAW can be an ally in helping make Magna more competitive in the global auto parts business and help maintain jobs in Canada as well as create new ones.
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By GlobalData“When we sat down, our mandate was: what must we do to create jobs?” he said.
The 25-page document outlines a new relationship for the company and the CAW, which has been mostly rebuffed in decades of trying to sign Magna workers up for the union.
Just three of Magna’s 61 Canadian plants are represented by the CAW.
Among the features of the deal are a no-strike, no-lock-out clause. Such disputes as battles over wage increases that might lead to a strike will be settled instead by binding arbitration.
Workers at each individual Magna plant will decide if they want to join the union in a secret-ballot vote during which management will be neutral.
Stronach said he would go further than that and actually encourage his employees to join the union.
The traditional grievance procedure, which provides unions redress when members are fired or disciplined, will be replaced by a concern resolution subcommittee that will have union and management members.
It includes an open-door policy during which employees can raise concerns with management at any time.
Wage increases will be based on a negotiated formula tied to increases in the annual average manufacturing wage in Canada and bonuses may be paid if plants meet certain goals.
Work rules will be flexible to make sure the company is able to adapt quickly, the document says.
In addition, key elements of Magna’s unique corporate culture will be included in the deal and enshrined as part of the structure of the company.
Among them are the Magna employee charter of rights, which outlines profit sharing and stock ownership plans and provides a telephone hotline for employees to raise concerns.
