CAW, Chrysler still far apart
The head of the Canadian Auto Workers says his union and Chrysler Canada remain far apart as a Tuesday deadline looms for the automaker to submit a restructuring proposal to the federal and Ontario governments.
The union's negotiating team held meetings about the talks to update its membership in Brampton and Etobicoke today and will hold another such meeting in Windsor on Sunday morning.
CAW President Ken Lewenza says the team "went through the difficulties" it's having and in both meetings, it was "almost unanimous that the pattern agreement struck at General Motors must be the objective of the union."
Lewenza says most of the discussions involving the CAW and Chrysler at a hotel in Toronto today are with smaller groups at the higher levels of both the union and automaker.
But he says he doesn't expect face-to-face negotiations involving the master bargaining committee members today or early Sunday.
Chrysler has asked the federal and Ontario governments for US$2.3 billion in loans and is seeking deeper concessions from the CAW, including on wages, than GM agreed to earlier this month.
'Now we're miles apart': CAW of Chrysler talks
Chrysler warned the CAW it must agree to a materially different labour deal than the one the union struck earlier this month with General Motors Corp. if the company is to continue building minivans and cars in the country. The ultimatum came Friday afternoon, just hours after the CAW insisted Chrysler must accept the GM contract as the general pattern.
"After several days of bargaining in good faith, Chrysler and the CAW have not reached an agreement that closes the competitive gap with other automobile manufacturers in Canada to ensure Chrysler's immediate viability," the company said in a release, adding it needs to cut all-in labour costs for active and retired workers by $19 an hour right away.
"Although we made progress toward 'closing the gap,' significant issues related to the existing 'pattern' remain," Chrysler said. "These are not normal business circumstances and all Chrysler constituents have been asked to 'break pattern' -- employees, retirees, dealers, suppliers and others." The company said it was seeking a contract in which worker base wages and pensions remained unchanged.
CAW workers have approved a new contract with GM. If that deal were applied to Chrysler, it would cut Chrysler's all-in costs by $7.25 per hour, industry sources said. The union and Chrysler had negotiated several productivity and operational changes worth several dollars per hour more than the GM agreement, CAW economist Jim Stanford said.
The union has traditionally negotiated a new contract with one of Detroit's three carmakers and used it as a general pattern for talks with the other two. The aim is to maintain the companies on an equal competitive keel.
"Two times in the last 48 hours we were within inches of a collective agreement," CAW President Ken Lewenza said. "Now we're miles apart."
Mr. Lewenza questioned who was making the final decisions at Chrysler, saying it has been difficult to determine the company's definitive stance on issues. The automaker is controlled by New York investment firm Cerberus Capital Management.
Chrysler said it is still open to talks. Mr. Lewenza said he wants Chrysler to submit a final offer for his consideration so a deal can be reached by March 31. The union will not strike to strengthen its position, he said.
Chrysler is asking the union to help it cut all-in hourly labour costs from the current $76 an hour to $57 an hour, the rate Toyota Motor Manufacturing Canada pays its workers. It has threatened to pull its manufacturing operations out of Canada if the CAW fails to narrow that $19 per hour gap, putting 9,400 jobs at risk.
GM is seeking an estimated US$6-billion in loans from Ottawa and Queen's Park to stabilize its footprint in Canada. Chrysler, which has assembly plants in Windsor and Brampton, Ont., is seeking US$2.25-billion. Both companies were required to cut labour costs to be considered for government aid.
GM and Chrysler have received a combined US$17.4-billion from the U.S. Treasury to avoid collapse. They're seeking as much as US$21.6-billion more in addition to the Canadian loans.
Barack Obama, the U.S. President, is expected to detail his intentions for the companies on Monday, the day before a March 31 deadline by which the automakers are required to submit progress reports detailing new union and lender agreements. Tony Clement, Canada's industry minister, said he would make an announcement about helping the two automakers before the end of the month.