View Full Version : As expected, Auto Unions Jump in to Help

12-20-2008, 01:02 PM
CAW says it won't budge on compensation


Globe and Mail Update

December 19, 2008 at 9:14 PM EST

TORONTO/OTTAWA — The Canadian Auto Workers is saying no to any concessions on compensation as their employers await a rescue package in lockstep with the $17.4-billion (U.S.) lifeline extended in the United States to the Detroit Three car makers.

Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty will announce Saturday Canada's own bailout in response to the loans approved Friday by the Bush administration. While Ottawa and Ontario have not yet attached any conditions to their bailout, the United States is seeking deep concessions from auto makers and their workers.

Mr. Harper is expected to say that the aid, all of which is earmarked for General Motors of Canada Ltd. and Chrysler Canada Inc., will be handed out on the expectation that unions will do their part to help the auto makers survive – as well as on the condition that vehicle manufacturers preserve a certain level of production in Canada. Some details of Ottawa's stipulations still need to be worked out, sources say.

Industry observers said Canada will have no choice but to follow the United States by seeking similar concessions aimed at bringing labour costs at the Detroit Three in line with those at U.S. plants run by Japanese auto makers.

Bank of Montreal economists Kenrick Jordan and Douglas Porter said in a report Friday that the competitiveness of the Canadian assembly plants would be negatively affected in the event that labour unions in the United States make further concessions on compensation.

“In reality, Canada has little option other than to match the U.S. moves step by step, lest Canada be hit with a disproportionate share of the inevitable cuts as the Big Three shrink operations in the years ahead,” the report says.

One industry analyst suggested the Canadian Auto Workers could be the “biggest loser” in Canada under the bailout scheme because it will likely force the union to make concessions on compensation.

“Our governments would be crazy to not force the same condition on the D3 in Canada,” Dennis DesRosiers, president of DesRosiers Auto Consultants, said in an e-mail Friday.

Calls by the Bush administration for the Detroit Three to align their total compensation – including health and pension benefits as well as wages – with those at the Japanese auto makers would lead to compensation cuts of between $10 and $15 an hour in the United States, Mr. DesRosiers said.

That will require the CAW to cut compensation anywhere from $15 (Canadian) to $25 an hour to align itself with the requirements outlined in the Bush bailout plan, he said. Currently in Canada, workers at the Detroit Three plants earn wages and benefits totalling $70 an hour, while their counterparts at the Japanese auto makers earn between $40 and $45.

Canadian Auto Workers president Ken Lewenza said he is concerned auto workers may be unfairly targeted by the conditions attached to the U.S. aid package. He said it is “ridiculous” to suggest the Detroit Three need to bring their labour costs in line with those at U.S. plants run by Japanese auto makers.

“This isn't about wages and benefits of workers,” Mr. Lewenza said in an interview. “We could work for nothing and we wouldn't sell another vehicle.”

The Detroit Three's Canadian auto plants have improved productivity enormously over the past decade and the CAW would like to focus on making further gains, he said. And he has an answer ready for Mr. Harper and Mr. McGuinty in the event they ask his members to make concessions: “We will maintain our competitive advantage in Canada without being dictated [to] by government,” he said.

Officials in the federal and Ontario governments would not disclose the size of their bailout. But Industry Minister Tony Clement announced more than a week ago that Canada's contribution would be proportional to its one-fifth share of the Detroit Three's North American auto production in this country. That would translate into $4.2-billion in loans.

Mr. McGuinty said this week that the emergency loans will be just the first instalment on what is expected to be a bigger bailout package. The Detroit Three are seeking at least $6-billion in loans and credit lines for their Canadian operations.

Mr. Harper will emphasize Saturday that Ottawa's help is contingent on the auto makers restructuring and becoming viable companies again. But he believes that this money should buy some guarantees.

12-20-2008, 09:56 PM
Ride it to the ground, baby.

Better that the company go bankrupt and lose our jobs than to give back compensation.