CAW says framework deals improve competitiveness of Canadian auto sector

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The Canadian Auto Workers union says the new collective agreements it has negotiated with the three big U.S. automakers will protect workers by improving the competitiveness of the Canadian manufacturing operations.

CAW president Ken Lewenza says the tentative contracts reached with Ford, General Motors and Chrysler will better position their operations in Ontario to combat pressures such as the high value of the loonie.

The deals allow the automakers to hire new employees at lower pay and benefit rates for a 10-year phase-in period, while keeping hourly wages for current employees steady over the life of the four-year contract.

New hires at Ford, GM and Chrysler factories in Canada will begin their careers at C$20 an hour, down from the C$24 starting wage under the previous deal, and take 10 years to reach peak pay levels of C$34 an hour instead of the six years.

New employees will also receive hybrid pension plans instead of pure defined benefit plans for current employees.

Chrysler CEO Sergio Marchionne had wanted Canadian autoworkers to adopt the permanently lower wage scales adopted last year by their counterparts in the United States under contracts negotiated by the United Auto Workers union.

In the U.S., new workers start at US$15.50 per hour and can rise to US$19.28 per hour compared with the US$28 per hour top rate paid to existing employees.

CAW members at Ford voted in favour of their agreement on the weekend. Chrysler workers will vote on Saturday and Sunday. The results of the GM ratification vote are to be announced Thursday.

Critics say the union won the battle with the U.S. automakers, but lost the war by refusing to agree to terms that would encourage long-term investment in the Canadian auto sector.

But Lewenza says the deals shouldn't preclude future investment even it doesn't contain guarantees after 2016.

The agreement preserves three shifts at Chrysler's minivan plant in Windsor, Ont., and two shifts at the car assembly plant in Brampton.

Ford and GM agreed to create 600 and 1,750 jobs respectively.

Lewenza says he would have liked to see long-term investment commitments in the contracts but said the products made in Canada are at their peak in their lifecycle.

He says the federal and Ontario governments need to adopt strategies that protect the Canadian auto sector by counteracting enticements offered by jurisdictions seeking to lure relocations.

Design and engineering work is underway so investment decisions should be made in 2014 and 2015 as they prepare for updates towards the end of the decade.

Organizations: General Motors, Ford, Canadian Auto Workers union United Auto Workers union

Geographic location: United States, Ontario, Canada Windsor Brampton

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