Surprize deal negotiated in secret bargaining
Apr 28, 2008 - 03:22 PM
Tony Van Alphen, Torstar News Services
TORONTO -- Ford and the Canadian Auto Workers have bargained a surprise three-year deal which would freeze wages for current workers but reduce pay temporarily for new employees in a deal that could pave the way for early contract settlements at General Motors and Chrysler this year.
CAW president Buzz Hargrove announced this afternoon that the deal with Ford would also immediately freeze a cost of living allowance until September next year for all workers and cut vacation pay. But the deal would also give employees a $2,300 bonus this fall and save the company's assembly plant in St. Thomas until 2011, he said.
In exchange for the loss of 40 hours of vacation pay or one week annually, workers would receive a special $3,500 payment in the fall of 2009.
The union described the deal as a monetary offer that will represent "the centrepiece" for intense collective bargaining with the goal of reaching a tentative agreement later this week. About 10,000 Ford workers would then need to ratify the deal.
The union's main and local bargaining committees have endorsed Ford's offer which follows secret negotiations for more than a month.
It marks a major break with tradition where negotiations at the Big Three would not start until July in a contract year.
However the CAW has been pushing for early talks because of fears that a continuing downturn in the U.S. market would weaken its bargaining position here.
The union is also under serious pressure to accept concessions including a two-tier wage system in efforts to lower labour costs and make the North American Big Three more competitive against their Japanese-based rivals.
In addition to freezes on wages, thousands of retirees won't get an increase in their inflation-indexed pensions for the first year.
Although the union stressed that it had "beat back" industry demands for a two-tier wage system, which the United Auto Workers accepted at the Big Three in the U.S. last year, newly hired workers at Ford of Canada would receive 70 per cent of base wages and gradually increased to 100 per cent of what current employees earn after three years.
The two sides also negotiated significant savings in health costs including a stricter limit on long-term cars plus a 10 per cent increase in prescription drug payments to a maximum of $250 annual per family.
The union also agreed to study opportunities with the company for a pre-funded, off-balance sheet retiree health benefits fund here. Ford and the UAW negotiated such a fund in the U.S. which will eventually reduce the company's burden on pension costs.
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