The Canadian Auto Workers union agreed to a new laborcontract with Chrysler, ending weeks of talks with the Detroit automakers andavoiding strikes and the possibility production will move to the United States.
CAW President Ken Lewenza said Wednesday night that Chryslermatched the four-year agreements the union reached with Ford and GM this month.
The contracts cut wages for new hires and freeze pay forcurrent workers. But the contracts also give them lump-sum payments to coverinflation and for ratifying the deal.
Chrysler workers will vote on the deal this weekend. Fordworkers ratified their agreement last Sunday and GM workers are votingWednesday and Thursday.
The auto companies had said Canada was the most expensiveplace in the world to make cars and trucks, and warned they could moveproduction south if the CAW didn't cut costs. The CAW represents about 21,000auto workers in Canada and about 16 percent of auto production in NorthAmerica.
Under the agreement new workers will receive 60 percent ofthe current top wage of $33.89 Canadian dollars (US$34.74). That would mean newworkers would be paid around CA$20.33 ($20.84). They can move up the wage scaleand reach the top wage in 10 years.
U.S. workers at the Detroit automakers approved a similartwo-tier wage agreement five years ago, but in those agreements, workers don'tautomatically get the top wage after 10 years.
In addition, the United Auto Workers union in the U.S. hasagreed to steeper concessions than the CAW, making U.S. labor costs cheaper.Going into the talks, the Detroit automakers were paying an estimated $60 to$62 an hour for labor and benefits in Canada, compared with $50 an hour atChrysler, $56 at Ford and $58 at GM, according to the Center for AutomotiveResearch, a nonprofit research group.
Canada's advantages in the past — a weak Canadian dollar andgovernment health care — have all but vanished compared with U.S. factories.
"We're satisfied that we got a reasonable deal and thatChrysler can grow in Canada," Lewenza said.
Lewenza said the union's pattern bargaining strategy worked.
"A tentative agreement has been reached betweenChrysler Canada and the CAW. We extend our appreciation to our Canadianworkforce for their patience during this pivotal round of collectivebargaining. We will not comment on the details of the tentative agreementduring the CAW ratification process," Al Iacobelli, Chrysler's VicePresident of Employee Relations said in a statement.
The federal Canadian and Ontario province governments workedin tandem with the U.S. government on auto bailouts in 2009 to maintainCanada's share of North American auto production. Canada's share peaked at 3.2million cars in 1999, about 17.4 percent of North American production. In 2011,Canada produced 2.1 million vehicles, or about 16 percent.