CAW Members Ratify Chrysler Pact

Members of the Canadian Auto Workers union at Chrysler Group LLC have voted by a 90:10 margin to approve the union's tentative contract agreement with the company.

The ratification completes quadrennial negotiations between U.S. carmakers at the Canadian union.

Contract terms varied little among the Detroit Three. CAW members will receive C$9,000 (US$9,150) in ratification and cost-of-living bonuses over the four-year life of the contract. But their base wages will be frozen.

Chrysler did not commit to creating new jobs in Canada. Ford and General Motors pledged to add 600 and 900 positions, respectively. But most of those openings are likely to be filled by laid-off workers.

The new agreements will do little to erase Canada's automotive labor cost disadvantage to the U.S. unless the companies persuade thousands of CAW members to retire soon, according to The Detroit News. The newspaper cites analysts who note that shedding veteran workers would allow the automakers to replace them with new hires earning 60% of the full C$34.30-per-hour wage.

The News says the new contract will allow the companies to offer buyouts to eligible production workers of a $50,000 lump-sum payment and a $20,000 voucher for the purchase of a new vehicle. Skilled-trade workers would receive a $60,000 lump sum and the same voucher.

Ford tells the newspaper it plans to offer buyouts to about 1,000 Canadian workers this year. GM doesn't plan to offer buyouts until 2014, according to the CAW. That's when the company is due to close a line at its Oshawa, Ont., assembly plant, The union doesn't expect retirement incentives at Chrysler because the company doesn't want to increase pension costs.