Chrysler and CAW Buddy Up, Get Cozy With One Another in New Union Contract

By Jacob Brown | September 27, 2012
After six weeks of bargaining, the Canadian Auto Workers and Chrysler have finally reached an agreement for the next four years, following Ford and General Motors in ratifying the new contract. Covering about 8,000 workers in Canada, the new union contract will include a $3,000 ratification bonus and $2,000 cost-of-living bonuses for 2013, 2014, and 2015. A more standardized cost-of-living graduation will take effect for 2016. And while Chrysler had introduced the idea of a two-tier wage system, which has been done in the U.S., the idea didn't go through in Canada. However, starting wage for new hires has been lowered to about 60 percent of the top rate, now sitting at $20.40 per hour. "Chrysler was determined to have a different agreement [than Ford or General Motors], and they were determined—quite frankly—to position themselves in a better position," said CAW president Ken Lewenza. And it did. Where Ford and General Motors both guaranteed more investments in their Canadian operations, Chrysler balked. There is no guarantee that the next-generation minivans will be built in the Windsor Assembly Plant that current manufactures the Chrysler Town & Country and Dodge Grand Caravan. And there's no guarantee that the Dodge Charger, Chrysler 300, and Dodge Challenger—or the rumored future SRT Barracuda sports coupe—would continue to be made in Brampton, Ontario. On the other hand, Ford secured a deal would be bringing 600 jobs to its Oakville, Ontario, plant that makes the Ford Edge and Lincoln MKX over the next four years. GM's guarantee includes a $675 million investment that will keep 1,750 jobs in Canada, likely at its plant that manufactures the Chevrolet Camaro and will be building the Chevrolet SS sports sedan. Chrysler has had a lot more stability in Canada than the other two North American automakers, shedding fewer than 100 jobs in layoffs compared to GM's 2,000 and Ford's 800. Chrysler said it would maintain its current workforce size through the next four years. All in all, Chrysler's plan allows for the most flexibility of the three automakers, giving it the ability to add more workers or pare its workforce the quickest depending on how the market goes. With the automaker's 2009 bankruptcy still in recent memory, we can see why it wants to run as lean as it does. Source: Detroit Free Press