CAW accepts deal with Chrysler

by Tom Morrison

Chrysler workers have approved a new four-year contract after voting more than 90 per cent to accept it Sept. 30.

The agreement is similar to the new Ford and General Motors contracts Canadian Auto Workers agreed to Sept. 14 and 20, respectively. Chrysler workers will receive three lump sums of $2,000 each December from 2013 to 2015 and a $3,000 ratification bonus. New workers will start at 60 per cent of the base wage rate and reach 100 per cent after 10 years of employment.

CAW Local 444 President Dino Chiodo said the greatest accomplishments for the CAW out of this deal were avoiding a permanent two-tier wage system and securing retirement benefits.

“It’s a matter of not compromising our philosophical principles with regards to a two-tier structure and at the same time maintaining, in a world where everybody is moving to a defined contribution pension plan for their employees, we were able to maintain a defined benefit plan,” Chiodo said.

With a defined benefit plan the employer agrees to pay the employee a fixed monthly amount each month after retirement. With a defined contribution plan the employer pays a set amount each year the employee is working. That money is invested and the employee is paid any returns it makes after retirement. Retired Chrysler workers will receive between $68 and $81 a month depending on the benefit class they fall under, plus a special allowance of either $3,515 or $3,895 a month until they turn 65.

Chiodo said the CAW’s goals in negotiating this contract were investment, job security and product allocation. He said they have job security because the agreement guarantees three shifts in Windsor and two in Brampton and this agreement will lead to product allocation and investment.

“We positioned ourselves for investment for future product allocation, which basically we’ve done through stabilizing fixed costs over a four-year period and well beyond that,” Chiodo said. “I think we have established ourselves as competitive over the course of the next 10 years and beyond.”

Tony Faria, co-director of automotive research at the University of Windsor, said this is a good deal for the CAW because they got almost everything they wanted, but it might not be good for the Canadian auto industry long-term because it hasn’t lowered labour costs.

“This contract is not a good one for the Detroit three and because of that, I think this is a short-term victory for the CAW in getting a real good contract with their existing workers,” said Faria. “It’s a long-term loser in terms of getting new investment and new jobs in Canada. … We’re not going to see any new assembly plants in Canada over the next 10 years.”

The current agreement lasts until September 2016.