Canadian Auto Workers back labour deal with Chrysler

Last of Detroit Three ratifies deal with 90 per cent in favour

(Reuters) — Unionized workers at Fiat SpA's Chrysler have voted in favour of a four-year labour agreement with the company, the Canadian Auto Workers (CAW) union said on Sunday.

Some 90 per cent of the Chrysler workers who voted backed the deal, the CAW said. The agreement covers 8,000 employees.

The Chrysler agreement was the last of the Detroit Three automakers to be reached and approved by employees in Canada after unionized workers at Ford and General Motors ratified their contracts.

"The new agreement rewards employees for their commitment during our ongoing recovery and narrows the gap on our future competitiveness here in Canada," said Al Iacobelli, vice-president of employee relations at Chrysler.

The ratification was widely expected although talks leading up to the agreement were tough as Chrysler, as well as the other two automakers, insisted that Canadian labour costs had to come down.

Of the three automakers, Chrysler and its chief executive, Sergio Marchionne, took the hardest line on a need for Canadian operations to become more competitive, threatening to move production out of the country if labour costs failed to decline.

Mirroring the Ford and GM deals, the Chrysler agreement freezes wages for existing workers for the first three years but provides for a cost-of-living adjustment in the fourth year. Workers will also receive a series of lump-sum bonuses.

New hires will start at a lower hourly rate than under the previous contract and take longer to reach the top of the pay scale.

Union negotiators had pushed hard for Chrysler to invest in building new vehicle models in Canadian plants, but the company, like Ford and GM, made no such promise in the deal.

Unlike Ford and GM, Chrysler did not commit to create new jobs in Canada. But when it comes to employment, Chrysler workers are in better shape than their peers, 800 of whom are on long-term lay-off.

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