TORONTO -- The CAW will refuse to agree to cuts in Canadian Auto workers wages that would create a two-tier system like that created by their American counterparts, says CAW president Buzz Hargrove. Mr. Hargrove and CAW Economist Jim Stanford held a news conference at the Royal York Hotel Tuesday afternoon where they emphasized the union's firm stance as it heads into what promises to be a challenging set of negotiations with the Big Three automakers this fall.
"We are not going to take less money for our workers," Mr. Hargrove said. "We could all work for nothing; we don't have a market for the product so if cutting wages makes the investment community feel better, the reality is it does not solve the problem."
Mr. Stanford summarized the union's arguments against a two-tier wage and benefit structure, as created after past negotiations between the automakers and the U.S. autoworkers union, the UAW.
That agreement included historic concessions to GM in order to keep plants operating south of the border. One of the concessions the UAW made was agreeing to two-tier wages for any new business that is awarded to a U.S. plant. So if the Impala, which is currently produced in Oshawa, is awarded to a U.S. plant, the workers building it will earn $14.20 an hour, as opposed to the $27 per hour they previously earned.
Last year's agreement between the UAW and management divided jobs into "core" and "non-core" jobs. The wage rate for new workers hired into the non-core jobs will be permanently cut in half and benefits still further. This agreement was sold on the basis of needing to compete with the Japanese transplants and doing it in a way that would shift the concessions to future workers.
Contracts for Canadian autoworkers with GM, Ford, and Chrysler expire in six months and talks between the union and automakers have been started earlier than usual given the "perfect storm" of negative circumstances creating difficult conditions for bargaining. They include the strengthening Canadian dollar, "unfair trade" policies that have seen a flood of imports cut into market share, the softening U.S. economy and high cost of oil, among others.
Unfair federal trade policies are to blame for the loss of market share due to the flood of imports coming out of Korea and other foreign countries, Mr. Hargrove said. Meanwhile the Big Three they are restricted from selling their vehicles in those markets.
Mr. Hargrove also took aim at Canada's finance minister, Jim Flaherty, who represents Whitby-Oshawa. Mr. Flaherty has criticized the McGuinty provincial Liberals for not cutting corporate taxes as a means to support the softening manufacturing industry.
"(Flaherty's) solution is to lower corporate taxes. Lower taxes are not going to make a difference," said Mr. Hargrove.
Canadian auto workers are among the most productive, he said adding that a GM spokesman said earlier Tuesday that the Canadian GM plant in Oshawa is considered that company's most productive in comparison to its plants around the world.
With the Canadian dollar strengthening, automakers had to pay Canadian workers more with the average Canadian autoworkers earning $32.50 per hour, about three dollars more than American workers.
But with their productivity ranked at 10 per cent or more above their American counterparts, the cost difference balances out he said. Also the average U.S. worker costs the companies two to three dollars more than Canadians because health care benefits are more expensive in the U.S., which doesn't have a public medicare system.
Mr. Hargrove and Mr. Stanford met with auto investors Tuesday in Toronto and will meet with investors and analysts in the American financial capital of New York City today.