CAW reaches tentative contracts with GM, Ford

1,000 jobs to be added in Ontario

(Reuters) — The Canadian Auto Workers (CAW) union said on Thursday it reached a tentative four-year contract with General Motors, after a day of fighting words from union leader Ken Lewenza and hours of grueling negotiations.

Earlier on Thursday, Lewenza said that if the two sides did not resolve their differences by late afternoon, he would give notice of a strike. Instead, talks continued into the evening.

"In today's economy, today's market share, it meets our goals," the CAW president said of the GM deal, which mirrored Monday's agreement with Ford on wages and benefits.

The CAW, which represents some 20,000 workers at the Detroit Three automakers, has been pushing to finalize agreements with GM and Fiat SpA's Chrysler since reaching the Ford deal.

Speaking at a news conference, Lewenza said GM had agreed to add a third shift to its "Flex" line in Oshawa, Ont., worth 900 jobs, and create 100 positions at its St. Catharines, Ont., facility.

GM had planned to shut down Oshawa's three-shift "consolidated line" in June 2013, but that line is now slated to operate with at least one shift until June 2014, Lewenza said.

The fate of the consolidated line was a key issue in talks, as it employs about 2,000 workers, nearly a quarter of the CAW's workforce at GM. Lewenza said the union now expected that no one with seniority would be on layoff at GM by the end of the new contract.

2 down

The Ford deal set a framework for talks with GM and Chrysler thanks to pattern bargaining, a long-standing union strategy meant to ensure no company has a labour cost advantage over the others.

Lewenza said the GM deal matched the pattern set at Ford. That agreement freezes wages for existing workers for the first three years. Workers will get a cost-of-living adjustment in the fourth year, and 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 level of the pay scale.

Lewenza urged Chrysler workers to be patient as bargaining continues, and said his sense was that Chrysler's team had been waiting for talks with GM to wrap up.

2-tier debate

Lewenza said the new tentative deal limited the role of GM's supplementary workforce employees, casual workers paid lower wages. The workers' roles were expanded in the last round of bargaining, he said, but they would now be brought on only for product launches and similar extraordinary periods.

The fate of the supplementary workers, who are unique to GM, proved a sticking point on Thursday. The CAW opposes a permanent lower-wage tier.

The Detroit Three and the United Auto Workers (UAW) have used a two-tier wage structure in the United States for the past several years to bring labour costs closer to those of foreign automakers. But the CAW has been adamant that new hires must eventually reach the top of the pay scale.

CAW workers at the Detroit Three earn an average of $34 in base hourly wage, compared with an average $28 for UAW workers, the Canadian union says.

Unionized workers at Ford's plants in Canada will vote on the tentative agreement this weekend. Lewenza did not say when GM's ratification votes would take place.

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