2009 Auto Restructuring
CAW Reaches Tentative Agreement with Chrysler, Voting this Weekend
TORONTO - The CAW has reached a tentative agreement with
Chrysler Canada Ltd. on a new collective agreement, as part of the North
American auto industry's restructuring process.
The agreement will result in over $240 million per year in annual cost
savings for Chrysler's Canadian operations, as a result of a combination of
benefit reductions, compensation changes, and increased productivity through
operational improvements. CAW members perform 12.5 million hours of work per
year for Chrysler Canada. The agreement therefore meets the benchmark for
negotiations which was established by the federal and Ontario governments as a
condition of their continuing support for the two companies.
The agreement includes all of the cost-saving provisions originally
included in the contract negotiated with General Motors Canada in early March.
It also contains some additional provisions, including:
- The elimination of semi-private hospital coverage.
- The elimination of a one-time $3,500 vacation buyout negotiated in
- The elimination of clawback reimbursement through the SUB program.
- The elimination of employee car purchase and tuition rebate programs.
- An increase in the waiting period for sickness & accident benefits.
- A reduction in the maximum dispensing fee for prescriptions.
The agreement also contains several operational changes that will further
enhance productivity and efficiency in Chrysler's Canadian operations (which
are already the most productive for Chrysler in the world). These provisions
include the adoption of the "World Class Manufacturing" operating system that
is used by Fiat in its global production operations. (Fiat is anticipated to
merge with Chrysler through the restructuring process.)
Finally, the agreement also contains measures aimed at providing retiree
pension and health benefits (so-called "legacy costs") in a more
cost-efficient manner. The pension contribution timetable is adjusted in line
with provisions announced by the Ontario government in its 2009 budget, and
the CAW and Chrysler have agreed to establish a Canadian Health Care Trust
(HCT) to provide retiree health benefits. This initiative will be similar to
U.S. VEBA arrangements, although with several important differences; the
details of this plan will be worked out over the next month.
CAW President Ken Lewenza indicated that the bargaining of the agreement
was extremely challenging, but expressed his support for the solidarity which
CAW members have demonstrated through the past difficult weeks.
"CAW members supported their union right through this process, rather
than allowing themselves to be intimidated by crude threats. That has allowed
us to bargain the very best agreement possible, imposing the minimum possible
sacrifice on our members and their families, despite the incredibly tough
CAW members working at Chrysler in Windsor, Brampton and Etobicoke will
vote on the new contract in a series of meetings held over the next two days.
Members of the media are welcome. Results of the ratification votes will be
released late Sunday night via Canada News Wire (CNW).