UPDATE 2-CAW says won't make deep cuts demanded by Detroit 3

Tue Sep 11, 2012 2:59am IST

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* Union says automakers demanding deep pension, benefit cuts

* Says Detroit 3 refuse to commit to production investments

* "No intention" of making deep cuts, CAW says

* Union may be willing to extend "earn-in", source

By Susan Taylor

TORONTO, Sept 10 (Reuters) - The Canadian Auto Workers union said on Monday it is facing "unprecedented demands" in contract talks with the Detroit Three automakers and, with one week until its agreements with them expire, has no intention of making deep cuts.

The CAW has warned that it could strike Chrysler, Ford and General Motors simultaneously if it cannot reach a new contract deal with at least one of them before all of the contracts expire at 11:59 p.m. eastern on Sept. 17 (0359 GMT, Sept. 18).

The union said in a bulletin to members that the companies are demanding that both current and future workers move to a defined contribution pension plan from a defined benefit plan and are also demanding the elimination of a clause allowing workers with 30 years' experience to retire with a full pension.

As well, the automakers want to create a two-tier workforce, the leaflet said, mirroring a concession they preserved in contracts with the United Auto Workers union in the United States last year.

The union may be willing to extend its "earn-in", the time it takes new hires to reach the highest end of the pay scale, from six to as many as 10 years, a union source close to the talks said. But the CAW has said repeatedly that permanently dividing workers into two wage classes is a non-starter.

The companies are also seeking the permanent elimination of cost-of-living adjustments and further reduction in benefits, such as prescription drug access, the union said.

It said the automakers are refusing to commit to any new production investments in Canada and that they are insisting that any reward or bonus that workers receive be balanced by cuts.

"CONSTRUCTIVE" DIALOGUE CONTINUES

GM said it continues to have an open and constructive dialogue with the CAW and is optimistic that negotiations can find solutions.

A Ford spokeswoman said negotiations are ongoing and the company remains open to discussing any proposal that will improve labor cost competitiveness.

"We are continuing to have constructive dialogue with our CAW partners in an effort to secure long-term employment in Canada as we have in the past," said a Chrysler source close to the talks.

"Numerous alternatives are being discussed that would minimize the impact on current employees while establishing new opportunities for future employees."

Strike captains at the union, which represents about 20,000 members at the three companies, met in Toronto on Monday to advance plans for a triple strike.

"All three bargaining committees are determined to reject these demands and reach a fair deal," the CAW said in the leaflet.

"The union recognizes the fragility of the industry and the need to stabilize fixed costs, while finding a solution rewards members' work. Unfortunately, our efforts have not been met with equal willingness by the companies to negotiate fair terms," the leaflet said.

The automakers say that Canada is the most expensive county in the world in which to manufacture vehicles and that costs must come down. The union argues that its members made major concessions in their last contracts, when the industry was reeling from recession, and that they now deserve to share in the industry's turnaround.

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