Automakers want union concessions

General Motors’ presence in Canada rumoured to be uncertain

In both the United States and Canada, the North American car companies are squeezing their unions to support the claims they are making to the respective national governments for bail-out money. The U.S. deadline for loans is February 14; the Canadian one is three days later on February 20.

The Canadian Auto Workers (CAW) is in talks with GM to re-open their contract ratified less than a year ago. According to CAW president Ken Lewenza, GM was especially interested in cutting back on paid time off and on healthcare costs. Other sources said legal aid, tuition assistance and even COLA were in the mix.

In agreeing to renegotiate, the CAW placed four conditions on the concessions: first, separate ratification of the package at each company; second, participation by the companies in the federal bail-out; third, guarantees by the companies of “their future proportional manufacturing presence and activity in Canada”; and fourth, the creation of a national auto strategy to address “trade imbalances between North America and the rest of the world.”

Despite that position, CAW Local 222 president Chris Buckley was quoted in the Globe and Mail as being “concerned” that GM might close its Canadian operations.

The jobs bank in the U.S., a legacy of the days when the United Auto Workers had more bargaining power and the Big Three had less competition, was suspended — likely permanently — on January 26 at Chrysler and on February 2 at GM. (There was no announcement from Ford.) The total of the jobs banks at the three companies was 4,000, down from a high of 12,000, after retirements and waves of buy-outs.

And, on February 3, GM and Chrysler offered buy-outs to their hourly workers. There was no announcement of the numbers expected, but both plans were targeted at those eligible for retirement and included $50,000 plus a $25,000 car voucher (Chrysler) or $20,000 plus a voucher (GM).

Part of the CAW’s strategy has been to point to the productivity of its plants. According to a report released by the union on January 26, CAW assembly plants are, on average, the most productive in North America, beating the U.S. by 11 per cent and Mexico by 35 per cent. They also point to the exchange rate, which finance minister Tony Clement argued should not be a factor in calculating labour costs.

The last word goes to Scotiabank, which predicts that the current inventory of unsold vehicles will begin to diminish in April, resulting in some moderate increase in activity by the automakers. However, it also points to the drop in value of Canadian-made parts in domestic cars from $2,000 in 2004 to $1,700 today and predicts further job losses and bankruptcies in the auto parts industry.

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