Monday, September 19, 2005

Canadian auto workers close to contract deal with DaimlerChrysler

By Beth Duff-Brown / Associated Press

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TORONTO -- The Canadian Auto Workers union said Monday that it was close to a contract deal with DaimlerChrysler and was optimistic its Ontario workers would not be called out on strike later this week.

However, union leader Buzz Hargrove warned that while they were progressing faster than anticipated with DaimlerChrysler, a strike by Ontario workers against the last of the Big Three automakers, General Motors, was a strong possibility.

Hargrove said the CAW expects DaimlerChrysler to meet the terms set in talks with Ford last week on wages, pensions and other issues. Talks could wrap up Monday, keeping 11,400 Ontario workers off the picket line. The strike deadline is midnight Tuesday.

"The likelihood of a strike at midnight tomorrow night is reduced substantially by the progress we made over the weekend," he said.

Ford Canada workers on Sunday overwhelmingly accepted a new, three-year labor deal, even though it offers some of the lowest wage gains in their union's history and allows for hundreds of layoffs in Ontario.

The financial terms and bargaining pattern set in the first of the Big Three agreements is typically followed by the remaining two. Hargrove last week had said a strike was looming with DaimlerChrysler over the issue of outsourcing some jobs.

But he told a news conference Monday that the issue appeared under control.

"There's a lot of good dialogue going on," he said. "The mood is much more positive and people are looking for mutually acceptable solutions."

Hargrove said DaimlerChrysler also had agreed the keep open the casting plant in Etobicoke, Ontario, saving some 450 jobs. He said that while 2,500 DC jobs were initially on the chopping block, it now looks to be "significantly less."

Windsor-based DaimlerChrysler, Canada's second biggest automaker by revenues, has said it wants to cut operating costs and streamline operations to become more competitive. With about 12,000 employees, it generated revenues of nearly $16.25 billion last year. Ford Canada trailed, with $15.3 billion.

Mark Gendregske, vice president of human resources for DaimlerChrysler Canada, said both sides were "working hard to find solutions to a number of issues." He noted the automaker had invested more than $2.2 billion in Canada since the last contract agreement in 2002.

General Motors, which has 22,000 workers in Canada, led the Big Three with revenues of $31.4 billion last year, but it is saddled with huge health care and pension liabilities.

Hargrove said a senior GM negotiator told him Monday that the pattern agreement "substantially disadvantages" General Motors.

"He says it's much more costly for them to do the same thing and he wanted to be absolutely clear that that's not acceptable and that we have to find a way to deal with that in bargaining," Hargrove said.

But he warned: "We're not going to change our pattern to accommodate any argument that General Motors has."

Bargaining on both sides of the table comes with a backdrop of grim forecasts for North American automakers. The Big Three have seen their combined North American share fall by 13 percent since 1996, while Asian makers continue to grab more sales.

Some analysts say it is only a matter of time before Toyota surpasses General Motors as the world's No. 1 automaker. GM lost $1.1 billion and $318 million in the first and second quarters of this year, respectively.

Ken Lewenza, chairman of the CAW's bargaining committee with DaimlerChrysler, lashed out against unfair trading practices threatening the livelihood of Canadian autoworkers.

The union insists the Big Three must address the trade imbalance with Asian countries, before going after labor costs at home. Roughly 1.9 million vehicles in Japan were imported by North America last year, but only 30,000 vehicles made in North America were exported to Japan, according to CAW figures.

The union and the U.S. government have accused Japan, for example, of having overly restrictive vehicle regulations, a lack of transparency and poor enforcement of antitrust laws.

"The vulnerability of this industry relies on some controls of imports that are coming into this country, or there will be absolutely nothing we can do in future bargaining," Lewenza said.