CAW to address Chrysler worry that contract deal costs too high

Chrysler not impressed with CAW’s deals with GM, Ford
||Last Updated: 09/24/2012

(Reuters) — The Canadian Auto Workers (CAW) union said it will attempt on Monday to resolve Chrysler's concerns that the contract deals the union has reached with Ford and General Motors are too rich for it to handle.

Fiat SpA's Chrysler, which held informal talks with the union on Sunday, is the only Detroit Three automaker without a labour agreement after the CAW negotiated four-year deals with GM and Ford last week.

On Sunday, 82 per cent of Ford's unionized workers ratified that company's deal and GM employees will vote Wednesday and Thursday on the pact.

Chrysler has been the most vocal of the automakers in saying that Canadian costs are too high, and told the union last week the deals the CAW negotiated with Ford and GM are too pricey. CAW president Ken Lewenza said, for example, that Chrysler wants to break a $3,000 signing bonus into smaller instalments.

The CAW, which represents more than 20,000 workers at the Detroit Three in Canada, reached the deal with Ford a week ago and has used it as the pattern in bargaining with the other two companies. Pattern bargaining is meant to ensure that no company has a labour cost advantage over the others.

The timing of any deal with Chrysler is difficult to predict, said CAW national secretary-treasurer Peter Kennedy.

"I don't know about today necessarily, that will all depend on how our initial meeting goes with Chrysler today, but we're hopeful we can get a deal this week," he told Reuters.

"Chrysler's indicated that some of the financial elements, the compensation package, is a little steep for them but there's ways of working around that and spreading it out, as long as at the end of the day it amounts to the same thing. Until we see something specific, it's all speculation."

The CAW's pattern deal includes lump sum bonuses for workers, but has no cost of living increases for the first three years of the deal.

New hires will start at a lower wage, earning 60 per cent of the highest hourly rate of $33.85, down from 70 per cent previously. It will also take them 10 years to reach the top of the scale, up from six years.

New employees will also have a hybrid pension plan that mixes a defined benefit and defined contribution plan. The defined contribution plan for current employees was unchanged.

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