The Canadian Auto Workers will reopen negotiations with Chrysler on Monday but is sticking to its position that it won’t cut labour costs to the level of US and Canadian foreign-owned transplant factories even after Fiat SpA chief executive officer Sergio Marchionne threatened to walk away from a strategic alliance with Chrysler unless the union gives in.
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“I was shocked to wake up to a new boss,” CAW president Ken Lewenza said after seeing comments Marchionne made in a newspaper interview on Wednesday about needing lower labour costs from both his union, and its US United Auto Workers counterpart, and an end to what the Fiat CEO called a “sense of entitlement” among the unions.
Cuts in labour costs to the level of Japanese or German automakers in North America would not be made, Lewenza declared. Chrysler’s Canadian plants don’t compete for investment with Honda and Toyota, Lewenza said; they compete with Chrysler’s US operations.
The union had agreed, he said, to maintain its competitive edge against UAW plants, but would not try to match the costs at the transplants.
Marchionne’s comments, however, added to the growing pressure on the union, which has resisted Chrysler’s demands to slash costs to about C$57 an hour from C$76.
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By GlobalDataThat is more than double the C$7 an hour the union agreed to give General Motors of Canada in an agreement approved last month.
“We have an economic pattern,” Lewenza said, pointing out that GM CEO Fritz Henderson had said the agreement met GM’s needs.
But both Chrysler and Ford Canada have rejected the GM deal as inadequate.
Chrysler president Tom LaSorda told Canadian politicians last month that the company would move its two assembly plants and one parts factory out of Canada if the CAW didn’t give Chrysler C$19 an hour in cuts.
The union and Chrysler broke off talks earlier this month because the company’s demands kept changing, Lewenza said.
He said Chrysler’s negotiations with the United Auto Workers have made it difficult for the CAW to reach a deal with the company.
He added that, as of earlier this week, Chrysler was still negotiating with the UAW and there were a number of issues unresolved.
The key point is the company’s financial contribution to the union-run trust that is scheduled to take over healthcare for US employees next year.
