After Ford Deal, CAW Moves On To GM

Canadian Auto Workers president said the union won't reach a labor agreement with GM unless the automaker commits to adding new products at its Ontario plants.

TORONTO (AP) -- The Canadian Auto Workers president said Monday that the union won't reach a labor agreement with General Motors Corp. unless the automaker commits to adding new products at its Ontario plants, but he was confident of a speedy resolution once talks begin this week.

Buzz Hargrove said the talks will begin on Thursday, following successful negotiations that took place with Ford Canada last week. The CAW will also hold an initial meeting with Chrysler Tuesday.

''We have the resources right now and the patterns are in place to go to work with both companies if they're willing to,'' Hargrove said.

But he stressed that GM can't get a settlement with the union unless it can solve the product allocations problem at three Ontario locations: Oshawa, Windsor and St. Catharines.

The current contracts with GM and Chrysler LLC run out in September and affect around 22,000 workers.

Hargrove said Monday that the union and GM have had some initial disagreements about numbers, which he did not specify, but he does not believe the differences would be insurmountable.

The talks with GM will begin a few days after CAW ratified an agreement with Ford Motor Co. late Sunday night. Nearly 8,900 CAW rank-and-file members voted 67 percent in favor of a three-year contract with Ford. The union initially said the vote tally was 78 percent, but corrected that to 67 percent Monday.

''Sixty-seven percent is a solid endorsement for the union to move ahead early and take the uncertainty out of the plants, out of the offices. The meetings have been tough, they always are, but overall they were successful,'' said Hargrove during a press conference Monday.

The surprise deal with Ford, reached months before the CAW's national auto contracts expire in September, keeps the company's labor costs essentially the same as they are now, the union said.

The CAW said Ford's total labor costs for active production workers will stay around $67 per hour, about $7 per hour more than the UAW. The CAW said the difference is wiped out by higher productivity at Canadian plants.

Ford Motor Co.'s top manufacturing executive said in an interview Monday that the company will save money with the new contract even though it doesn't include the lower-tier pay scale used in the U.S., where new hires would be paid about half the hourly wages of older employees.

Group Vice President of Global Manufacturing Joe Hinrichs said that Ford was able to freeze base wages and pension costs and buy the CAW out of one week of vacation. Hinrichs also said that Ford won more production time at its Oakville, Ontario, factory that makes the strong-selling Ford Edge and Lincoln MKX crossover vehicles.

Chrysler LLC Vice Chairman Tom LaSorda told the Detroit Free Press last week that Chrysler needs a competitive deal with the CAW, and he wasn't sure Ford's agreement is competitive. But he said at the time he hadn't read the contract.

Hinrichs said there was ''significant movement'' in wages, pensions and time off. Ford also won an entry-level wage that starts at 70 percent of the top hourly rate and grows to the maximum in three years. That will bring Ford significant savings as it hires new workers, Hinrichs said.

But the contract didn't gain Ford what it and the other automakers got from the UAW last fall -- a lower-tier wage rate of around $14 per hour, about half the hourly rate of a UAW production worker.

''How much further do people think we're going to go without a strike?'' Hinrichs asked. ''You also have to ask yourself what's ratifiable with the work force.''

Besides the Edge and MKX, the Oakville plant is scheduled to begin producing the Flex large crossover this summer, making it a critical plant for Ford.

''The good news is we're sold out on production there,'' Hinrichs said. ''Thirty more minutes of production there is worth a lot of money.''

Industry analysts have said Ford settled early to avoid a strike at Oakville, which makes high-profit vehicles that are important to Ford's cash flow.

But Hinrichs said Ford didn't settle just to maintain labor peace. He said Hargrove came to Ford to open the talks early.

''Oakville is a very important plant for us, and the products there are hot sellers, there's no question about that,'' Hinrichs said. ''It's not fair to characterize that we went early in order to protect Oakville.''

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