Canadian Auto Workers union has made a major breakthrough in its bid to organise
workers at vehicle parts giant Magna International Inc. by reaching a tentative
deal on a first contract at a major Magna seat making plant in Windsor, Ontario.
Negotiations on a deal concluded Thursday and ended more than two years of
battling that included the dispute becoming a key issue in contract talks between
the CAW and DaimlerChrysler Canada Inc. in 1999.
Details of the first contract will not be made available until about 700 workers
at the Integram Seating division of Magna’s Intier Automotive Inc. unit vote
on the tentative agreement on Saturday.
But the three-year contract will include clauses and regulations that are found
in agreements with other car parts makers, said Hemi Mitic, an assistant to
CAW president Buzz Hargrove.
Mr. Mitic said he hopes the deal at Integram will help the CAW organise other
Magna plants in Ontario. The union has made efforts to organise workers at two
key Magna stamping facilities in the province, including its hydroforming plant
in St. Thomas, Ontario.
The deal marks a return to Magna for the CAW, which has been struggling to
unionise workers at Magna plants for years and actually was the bargaining agent
for employees at a small plant in St. Catharines, Ontario, for several years
until that plant was decertified in the mid-1990s.
A ujnion bid to organise the Toyota Motor Manufacturing Canada Inc. assembly
plant in Cambridge, Ontario, was defeated earlier this year.
Magna has fought hard to keep the CAW and its US counterpart the United Auto
Workers from establishing themselves at its North American plants.
The vehicle components giant has argued that its unique human resources philosophy,
which includes a worker complaint hotline, annual profit sharing payments and
a share ownership plan make the union unnecessary.
News of the deal came just one day after Magna reported strong third-quarter
financial results in what is normally a weak quarter because of summer shutdowns
at North American auto makers.
Magna reported profit from operations of $US99 million in the quarter, up from
$89 million a year earlier, based on sales of $2.51 billion versus $2.35 billion
in the three months ended Sept. 30, 2000.
Profit and sales jumped despite lower vehicle production volumes at major customers
in both North America and Europe.
The results represent the strongest third quarter in Magna’s 44-year history
and set us apart fro our U.S. supplier peer group, president and chief
operating officer Jim Nicol told analysts during a conference call on Thursday.
Nonetheless, Magna is preparing for a downturn in production in the rest of
the fourth quarter, especially in North America, where production is expected
to decline from year-earlier levels despite the major positive impact no-interest
financing is having on sales.
Magna’s capital spending has been trimmed back to between $US500 million and
$US525 million for 2001, compared with earlier expectations of between $US600
million and $US650 million.
We’re scrutinising capital expenditures probably harder than at any time
in our history," said Nicol.
But neither he nor other company officials would reveal their plans for capital
spending in 2002 or their expectations for the European and North American vehicle