CAW to Resist Lower Pay for New Hires Hargrove Says (Update2)
CAW to Resist Lower Pay for New Hires, Hargrove Says (Update2)
By Bill Koenig
Feb. 14 (Bloomberg) — The Canadian Auto Workers plans to
resist lower wages for new hires at General Motors Corp., Ford
Motor Co. and Chrysler LLC, a concession made by the automakers;
largest U.S. union last year.
“We are not going down the road of two-tier wages,;; CAW
President Buzz Hargrove said yesterday in a telephone interview
from his Toronto office. “The real problem is imports, imports,
imports and market-share loss, market-share loss, market-share
loss. You can;t bargain your way out of it.;;
The Canadian union is preparing for bargaining later this
year with the three U.S.-based automakers, which employ about
30,000 of its members. GM, Ford and Chrysler under four-year
contracts negotiated last year with the Detroit-based United Auto
Workers can pay lower wages and benefits at U.S. factories.
Under the U.S. contracts, new hires receive about half the
combined wages and benefits of UAW members on the job before the
agreements. GM and Ford are making buyout and early-retirement
offers to UAW-represented employees in part to take advantage of
those provisions. The concessions were intended to help the U.S.
automakers stem losses and narrow a cost gap with U.S. factories
of Asian competitors led by Toyota Motor Corp.
“At the end of the day, it does nothing,;; Hargrove said of
lower wages for new hires. “We;ve had more layoffs and buyouts
announced since the UAW concluded its negotiations.;;
Besides the GM and UAW buyouts in the U.S., Chrysler said in
November it was doubling planned job cuts to as many as 25,100
employees, as well as scrapping four models.
The number of CAW members at the three automakers has fallen
from about 41,000 in 2005, the last time the union conducted
negotiations. The Canadian union split from the UAW in 1985.
Currency Effect
Canada has lost some of its cost advantage for automakers.
The value of the Canadian dollar is now about equal to the U.S.
dollar, rising from 63 cents in 2002 and 81 cents in 2005, the
last two times the CAW negotiated with the companies.
“What;s happened with the Canadian dollar versus the U.S.
dollar has had a ramification on our business model in Canada,;;
Joe Hinrichs, Ford;s manufacturing chief, told reporters at a
Jan. 8 dinner in Dearborn, Michigan.
Ford in the CAW negotiations wants “to find solutions that
work for both parties,;; he said. “There are significant
opportunities in our manufacturing business in Canada.;;
Kathleen Ligocki, a former chief executive officer of
supplier Tower Automotive Inc., said Feb. 8 at a conference in
Chicago that Canada “is now the high cost place to do
business.;;
Detroit-based GM slid 64 cents to $25.82 at 4:03 p.m. in New
York Stock Exchange composite trading, while Dearborn-based Ford
fell 12 cents to $6.46. Chrysler, 80.1 percent owned by Cerberus
Capital Management LP, is closely held.
To contact the reporter of this story:
Bill Koenig in Southfield, Michigan, at
