The Canadian Auto Workers union finally reached an agreement with Chrysler Group LLC on Wednesday after negotiations went on for weeks with the Detroit automakers.
The CAW has now officially signed the "Big Three" auto companies to new deals, avoiding strikes and keeping labor costs low enough to make more jobs and new investments for Ford, General Motors and now Chrysler.
Chrysler's Vice President of Employee Relations and chief negotiator Al Iacobelli confirmed the agreement, but would not comment on how the deal affects the company until it is ratified.
"A tentative agreement has been reached between Chrysler Canada and the CAW. We extend our appreciation to our Canadian workforce for their patience during this pivotal round of collective bargaining," said Iacobelli in a statement.
Chrysler agreed to match key wage and benefit clauses negotiated first with Ford and GM. The companies will now get similar deals that hold the line on wage costs with a four-year freeze on pay and give them an opportunity to start cutting hourly labor costs. This will be achieved through reduction of pay and benefits that will apply to new employees hired from now until 2016.
The union battled with the companies' initial demands for drastic cuts in wages and benefits and insistence that Canadian workers match the 2011 agreement the auto makers reached with the United Auto Workers in the United States. The contract the U.S. agreed to calls for permanently lower wages for newly hired workers and pay increases that are based on profit.
In the Canadian plants, new workers will start at around $20 an hour and progress to full wages of $34 an hour after 10 years. Current workers will receive a $3,000 signing bonus and bonuses of $2,000 in each of the final three years of the contract. This will happen whether the companies are profitable or not.
The auto companies had said Canada was the most expensive place in the world to make cars and trucks, and warned they could move production south if the CAW didn't cut costs. The CAW represents about 21,000 auto workers in Canada and about 16 percent of auto production in North America.
"The agreements indicate that Canada is now quickly moving toward being competitive with the U.S. industrial north," said Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc.
See Now: OnePlus 6: How Different Will It Be From OnePlus 5?
