CAW vows to resist ‘overzealous’ concessions in Big 3 talks

CAW vows to resist ‘overzealous’ concessions in Big 3 talks
From wire reports
Automotive News | August 14, 2012 – 2:11 pm EST
UPDATED: 8/14/12 6:05 p.m. ET

TORONTO — Ken Lewenza, president of the CAW, says he will resist concessions on wages for existing and new members as it begins negotiations for a new labor contract with General Motors Co.

“I warn the companies not to be overzealous in their talks,” Lewenza told reporters in Toronto. “Again, I don’t want to emphasize the term ‘warning’, but the reality is our membership has put us on notice that the corporations’ period of overzealousness, quite frankly, must come to an end.”

The CAW began labor talks with GM and Chrysler Group LLC on Tuesday and will start talks with Ford Motor Co. on Wednesday to secure a new contract for 20,777 auto workers. The current contract expires Sept. 17.

Ford in July called Canadian labor costs the most expensive it faces in the world and said bringing costs down is a priority in negotiations.

Lewenza said the union and GM were “miles apart” after their initial meeting today.

Canadian talks get under way a year after the CAW’s American counterpart agreed to forgo base wage increases in a bid to lower labor costs. It is the first Canadian contract to be negotiated since GM’s and Chrysler’s government-backed bankruptcies.

Lewenza, said his union is opposed to profit-sharing, and his union wants “recognition” of the sacrifices workers made to keep the companies alive during the recession now that the companies have returned to profitability.

The Canadian union accepted a pay freeze and gave up bonuses and time off along with other concessions as part of the restructuring that brought General Motors and Chrysler out of bankruptcy in 2009.

Investment commitment

“The memories of 2009 are still pretty fresh and pretty painful for all of our members,” Lewenza said.

Lewenza said he expected workers to share in the profits the companies have seen since 2009 although he didn’t specify what the “repayment” would be.

“We’re not saying give back everything we lost, we lost a lot in 2008,” said Jim Stanford, the union’s economist in an interview. “What we’re saying is recognize what workers have given up.”

Lewenza called for a commitment from GM to invest in Canadian facilities to improve productivity and maintain current production levels.

“Competitiveness will be the main focus of the discussions,” Lauren More, a Ford spokeswoman, said in an e-mail. “Right now, labor costs are higher in Canada than at any other Ford operation in the world. When it comes to future investment, labor costs are one of the most important considerations.”

Ford estimates that it spends $79 for every hour of work in Canadian plants, when including costs for benefits and retirees, compared with $64 an hour in the U.S., $48 in Germany and $35 in

Australia, More said. Looking just at wage rates, CAW assemblers get about $34 an hour, 21 percent more than the $28 paid to a senior worker represented by the Detroit-based UAW, she said.

Legacy costs

The CAW disputes Ford’s estimates, saying much of the gap relates to former employees. Without these so-called legacy costs, union labor runs a little more than C$62 an hour, compared with C$60 for workers in the CAW’s American counterpart, said Stanford, who estimates the difference in labor costs between all three companies is 5 percent.

GM said June 1 that it plans to shut its consolidated assembly line in Oshawa, Ontario, in June 2013, which will eliminate 2,000 jobs, according to the CAW.

The company plans to move production of its Chevrolet Equinox crossover from Oshawa to Tennessee, where workers will earn about $14 an hour in wages.

The CAW said Tuesday it had “informal discussions” in which GM raised the possibility of extending the life of the assembly line.

Chris Buckley, who heads the CAW’s Oshawa local, said the union would talk about the issue during contract negotiations.

But the union will not make concessions in the contract to extend the line’s operations, he said.

“In my opinion General Motors was overly aggressive when they first approached us,” he said in an interview with Reuters.

“They’re not doing it out of the kindness of their heart, there will be a price of admission, and we have yet to see what the price of admission is.”

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