CAW, Chrysler close; GM next

[Charles Brown <cbrown@xxxxxxxxxxxxxxxxx>]

CAW, Chrysler close; GM next

Automaker backs off job cuts, plant closure, union says; GM pact may prove
tougher.

By Brett Clanton / The Detroit News

What's next

. Chrysler and the CAW must negotiate final details of a three-year contract
before a strike deadline of midnight tonight.

. CAW members at Chrysler would vote as early as this weekend on a tentative
agreement.

. GM and the CAW must reach an agreement.



The Canadian Auto Workers is close to reaching a tentative labor agreement
with Chrysler after making progress in negotiations over the weekend, but
the union said it is locking horns with General Motors Corp. over a separate
labor pact and may decide to strike the automaker by next week.

The CAW had hoped to announce an agreement with DaimlerChrysler AG's
Chrysler Group on Monday afternoon, allowing the union to begin negotiating
with GM and move a step closer to wrapping up contract talks with Detroit
automakers for three years.

The union later said it would make an announcement at 10 p.m. but then
canceled the event late Monday evening.

CAW President Basil "Buzz" Hargrove said the union was "making progress" in
talks with Chrysler. But now negotiations appear to be going down to the
wire -- the union has given the automaker until 11:59 p.m. today to reach a
deal or face a strike.

CAW workers at Ford Canada voted overwhelmingly Sunday to approve a
three-year labor pact. But the CAW has had more trouble getting Chrysler and
GM to agree to the same terms.

Hargrove said GM officials believe the Ford pact, which allows for modest
wage gains and increases to retiree pension programs, would put the
automaker at a disadvantage with Chrysler and Ford because GM has more
retirees in Canada. That means GM, which has racked up $2.5 billion in North
American losses this year, would take a bigger financial hit from the
increased pension contributions.

On Monday, Hargrove said that Al Green, GM's top labor negotiator in Canada,
said the automaker could not accept the master agreement as it stands.

"He's saying it's much more costly for them to do the same thing, and he
wanted to be absolutely clear that it's not acceptable," Hargrove said.

"I'm hoping this is just some tough talk out of GM, and once we get a
deadline, that will start to shift a bit."

The deal reached between the CAW and Ford increases the company pension
payment by $8 per month for a retired production worker and by $11 per month
for a retired skilled trades worker, according to the union.

GM has 24,000 CAW retirees, more than double the number at Ford, which has
about 10,000. Chrysler has roughly 9,000 retirees.

A GM Canada spokesman could not be reached for comment.

The CAW has not set a deadline for reaching an agreement with GM, but
Hargrove said it will likely be "sometime next week." He did not rule out
the possibility of a strike if the two sides cannot come to terms.

"Right now, where the company's at, they're headed for a shutdown."

Late last week, Hargrove all but guaranteed a strike at Chrysler after the
automaker pressed for factory work rule changes to improve productivity, the
closing of its Etobicoke casting plant and the right to outsource certain
work -- moves the union said could mean the loss of 2,500 jobs in Canada.

But Monday, Hargrove softened the rhetoric, saying the CAW was willing to
find ways to "modernize" Chrysler's plants and could stomach some job
losses, but only through attrition.

The CAW said Chrysler has backed off a demand to close the Etobicoke plant
by 2008, which would have eliminated 450 jobs. The automaker now plans to
phase out certain "obsolete" product lines and cut about 60 jobs but will
keep the plant open, Hargrove said.

The automaker has agreed to "significantly less" than the 2,500 job cuts
mentioned in negotiations, he said, declining to elaborate.

Mark Gendregske, vice president of human resources at DaimlerChrysler
Canada, offered no details of the negotiations, which affect 10,600 active
employees.

"The company and the CAW bargaining teams are working hard to find solutions
to a number of issues," Gendregske said in a statement.

"We are working on finalizing an agreement that balances the needs of the
CAW, our employees and the company."

While an agreement with Chrysler would be a victory in some ways for the
CAW, it may be a bigger win for Chrysler, which, like Ford and GM, wants
relief from rising Canadian labor costs. Under the master agreement with
Ford, wages will rise less than 2 percent each year of the three-year pact
-- a sharp decline from the roughly 5 percent annual growth rate under the
previous contract.

A deal at Chrysler would signal Detroit automakers are having success
convincing the CAW that brutal industry conditions and the rising cost of
doing business in Canada require compromises from the union.

Because of their weakened financial position, the Big Three have taken a
harder line with the CAW this year, setting an aggressive agenda early and
putting the union on the defensive going into negotiations.

As early as May, for example, Chrysler publicly stressed that the union's
wages and benefits were rising at a reckless rate. Chrysler also held
meetings with the CAW leadership through the summer to lay out its case and
to temper union expectations that it could win the gains it was seeking.

"They appear to be much clearer in terms of an agenda," said Alan Hall, a
professor of labor studies at the University of Windsor in Ontario, speaking
of the Detroit automakers.

"I guess they judged their situation as putting them a bit more in the
driver's seat."

Detroit automakers have steadily lost market share in recent decades as
imports have attracted more buyers, a shift that has hurt profitability and
caused them to take a hard look at the competitiveness of their Canadian
operations.

But the CAW says that even with increasingly unfavorable currency exchange
rates, Canadian workers are less costly than union-represented autoworkers
in the United States because they benefit from government-subsidized health
care and are generally more productive.

You can reach Brett Clanton at (313) 222-2612 or bclanton@xxxxxxxxxxxx

Previous reports

 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> CAW
union targets DaimlerChrysler in next round of talks
<http://www.detnews.com/2005/autosinsider/0509/16/01-315146.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif>
Windsor feels pinch of Big 3 downsizing
<http://www.detnews.com/2005/autosinsider/0509/16/C01-317079.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> Ford
to cut 1,100 CAW jobs
<http://www.detnews.com/2005/autosinsider/0509/16/A01-313100.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> CAW
expects tentative contract settlement with Ford
<http://www.detnews.com/2005/autosinsider/0509/12/01-311916.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> UAW,
CAW talks pick up steam
<http://www.detnews.com/2005/autosinsider/0509/12/C01-308789.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> GM
gets tough in talks with the CAW
<http://www.detnews.com/2005/autosinsider/0509/07/C01-306262.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> CAW
is open to bargain
<http://www.detnews.com/2005/autosinsider/0507/25/C01-254549.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> GM
asks CAW to hold union wages steady
<http://www.detnews.com/2005/autosinsider/0507/20/C01-253542.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> U.S.
automakers, Canadian union enter talks with much at stake
<http://www.detnews.com/2005/autosinsider/0507/18/0auto-250872.htm>
 <http://www.detnews.com/pix/staticimages/general/arrow-red-small.gif> CAW
wants more perks, not fewer
<http://www.detnews.com/2005/autosinsider/0507/13/C01-245759.htm>