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Canada's CAW hopes to avoid strike after targeting Ford
September 17, 2012 / 1:57 PM / 5 years ago

Canada's CAW hopes to avoid strike after targeting Ford

* Strike deadline at just before midnight on Monday

* Talks continue with all three automakers, focus on Ford

* No deal yet with Ford, negotiations “fluid”

TORONTO, Sept 17 (Reuters) - Facing an end-of-day strike deadline, the Canadian Auto Workers union said on Monday it was hopeful it could reach a framework agreement with Ford Motor Co and avert a damaging work stoppage, but it warned that talks could still fall apart.

While focusing on Ford, the union was still in negotiations with the other two Detroit car companies, Fiat SpA’s Chrysler Group LLC and General Motors, but both automakers are still demanding “significant concessions,” the CAW said in a leaflet to its members.

The union, which represents some 20,000 workers at the Detroit Three automakers, chose Ford on Sunday as the lead company for contract talks, saying it has been most receptive to a CAW proposal to cut labor costs. The main issue is the industry’s insistence that the CAW accept a permanent two-tier wage scale for new hires and veteran workers.

Without a tentative agreement before the strike deadline of 11:59 p.m. on Monday (0359 GMT, Tuesday), the union said it could stop work at one or all three automakers.

“We are optimistic though that with this latest development a strike can be avoided,” the CAW said in the flyer, referring to its focused negotiations with Ford.

If the union reaches an agreement with Ford by the deadline, it will require a firm commitment from GM and Chrysler that they could work within that deal framework to avoid a strike at those two companies, CAW President Ken Lewenza said on Sunday.

“We do not yet have a deal with Ford, there are many details still to be worked out, but our hope is to establish a framework that we will then take to General Motors and Chrysler,” the union said in the flyer. “Even at this late stage, negotiations are fluid and it is still possible that talks with Ford could fall apart.”

Labor costs have been the key sticking point in negotiations that started last month.

All three automakers - with Chrysler the most publicly outspoken - have argued adamantly that Canadian labor costs are the highest in the world and must drop to match those of their United Auto Workers (UAW) in the United States, or future production and investment there will be put in question.

The CAW, however, seeing the profits once again being generated by the automakers, wants some payback for concessions its members made during the 2008-09 financial crisis.

The Detroit Three and United Auto Workers in the United States have used a two-tier wage scale for the past several years to bring labor costs closer to those of foreign automakers.

The CAW is adamant that its new workers, who start at 70 percent of veteran workers’ wages, must over time reach the same pay scales as existing workers. In the United States, they do not.

It has proposed a lower starting wage as well as an extended “earn-in,” the time it takes new hires to reach the highest end of the pay scale, from the current six years to 10 years.

A strike at all three companies would result in lost production of about C$200 million ($206.50 million) a day at the companies and their suppliers, according to the CAW.

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