Tuesday, April 21, 2009

Chrysler Canada deal will be competitive with U.S. plants: CAW

The head of the Canadian Auto Workers said Monday the union will ensure Chrysler Canada stays competitive with unionized U.S. plants, but what that means is not clear.

That's because the United Auto Workers (UAW) hasn't formalized a deal with either Chrysler or General Motors.

"Things are shifting enormously, especially with our UAW colleagues in the U.S.," Ken Lewenza told reporters Monday.

The Canadian union is under pressure from the company, governments and Chrysler's potential partner, Fiat, to slash salary and benefit costs by $19 an hour per employee from the current $76.14 to compete with Canadian non-unionized car plants.

The CAW disputes the figures, which Chrysler Canada released last week. Lewenza said a $19 an hour cut is "not feasible."

He pointed to the $7-an-hour reduction the union negotiated with GM. The company has said that cut is competitive.

Lewenza has said the CAW wanted to maintain the pattern style of bargaining in the industry, in which contracts with all three Detroit automakers are roughly the same. A $19 cut at Chrysler and a $7 reduction at GM would break the pattern.

On Monday, he hedged when asked about that possibility. "I don't want to speculate at this particular time," he said.

Chrysler needs a deal with the CAW and Fiat by the end of April to get long-term financial support from the U.S. and Canadian governments. Negotiations between Chrysler Canada and the CAW were expected to resume Monday after a break since March.

Without the government support, Chrysler might have to seek bankruptcy protection.

Fiat CEO Sergio Marchionne is expected to travel to Washington and Detroit Tuesday to work on a deal to link Fiat and Chrysler.

With files from The Canadian Press