Chrysler, CAW reach deal to save company $240M a year

CAW President Ken Lewenza tells reporters at a press conference in Toronto that the new deal with Chrysler will include no cuts to employees' base wages or pensions.(Nathan Denette/Canadian Press)

Chrysler and the Canadian Auto Workers union have reached a tentative agreement that will save the automaker $240 million a year, CAW president Ken Lewenza announced Friday night.

Lewenza called the deal a "victory" for workers, albeit one reached with a gun to their heads.

While there will be no cuts to employees' base wages or pensions, the deal will achieve savings equivalent to the reduction of $19 an hour in labour costs that Chrysler was demanding, he said.

"This agreement meets the benchmark that was set by the federal government to guide our bargaining," Lewenza said.

"Some of it comes from reduced compensation, some of it comes from lower legacy costs, some of it comes from increased productivity and efficiencies in the workplace."

The deal includes many of the same concessions included in the GM agreement, but also includes cutting the employee car-purchase plan and tuition rebates by next year, as well as semi-private hospital coverage, among other things. Long-term care was reduced and paid breaks were limited to 40 minutes a day.

"We have done our job here. We have met the cost target, not just by tightening our belt, but also by boosting productivity. In the long run, that's a much better way to keep our plants around in the long term," Lewenza said.

He called the negotiations, which began Monday "the most torturous and unfair process anyone can imagine."

He blamed the crisis in the auto sector on the global financial system, speculators, hedge funds and free trade agreements.

"Yet working people are being asked to pay for this crisis by corporations and governments alike," he said.

Workers will vote on the deal at ratification meetings this weekend at Chrysler's three Ontario plants, which are in Windsor, Brampton and Etobicoke.

The deal paves the way for Chrysler's technology-sharing alliance with Fiat, which would give the Italian automaker a 20 per cent stake in Chrysler. If there wasn't a substantial reduction in costs, Fiat had said it would abandon the alliance.

Chrysler is facing a government-imposed deadline of April 30 to restructure, including winning concessions from its workers in Canada and the United States. Failure to meet the deadline would have meant an end to further government financial aid and probably bankruptcy protection, perhaps ending in liquidation of the company.

Chrysler employs about 10,000 hourly workers and 1,000 white-collar employees at its assembly plants in Canada.