CAW talks with GM slow; Chrysler deal said distant

Wed Sep 19, 2012 5:40pm EDT

1 of 2. The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009.

Credit: Reuters/Jeff Kowalsky/Files

(Reuters) - Contract talks between the Canadian Auto Workers (CAW) and General Motors Co were "bogged down" on Wednesday on plant-specific issues, a CAW official said, making a quick breakthrough on an overall deal unlikely.

Two days after the union and Ford Motor Co reached a tentative contract agreement, separate CAW talks with Fiat SpA's Chrysler Group LLC were less advanced than the GM negotiations and the two sides remained far apart.

"Right now things have kind of bogged down on some local issues," CAW National Secretary-Treasurer Peter Kennedy said of the GM discussions. The local issues concern job security and work standards, he said.

"We have been in meetings back and forth on that, trying to clarify those and get those issues behind us, so we can focus on the economics of the deal," he said in an interview.

Asked if he expected a deal to be reached with GM on Wednesday, Kennedy said: "No".

The slower pace of talks follows optimism on Tuesday that a GM deal might not be far off. CAW National President Ken Lewenza had said on Tuesday that the union had had a "very constructive" discussion with the leaders of the GM negotiating team and that the two sides had discussed the Ford framework agreement in detail.

The union, which represents some 20,000 workers at the three Detroit automakers, reached a tentative four-year deal with Ford on Monday, which includes lower starting wages for new hires, and a longer earn-in to reach the top level of the pay-scale.

The CAW has made the Ford agreement the pattern for bargaining with GM and Chrysler. GM has already made a counter proposal to the Ford deal.

Once the workplace issues are resolved with GM, the two sides can sit down and "clean up the agreements around the pattern", Kennedy said.

CAW STILL AWAITING CHRYSLER PROPOSAL

Talks with Chrysler were lagging, however. By late Wednesday afternoon, the CAW had still not received a written proposal from Chrysler in response to the Ford framework deal, Kennedy said. He added that the union was not preparing to call a strike against Chrysler yet.

The CAW has said it would keep negotiating with GM and Chrysler as long as progress seemed to be in sight. If talks become deadlocked, however, the union was still threatening to call its first Canadian auto strike since 1996.

"We've had some dialogue back and forth but nothing really substantive with respect to the economics of the pattern agreement," Kennedy said of the Chrysler talks.

Chrysler declined to comment on the status of the talks. GM would only say that talks were ongoing.

Although there are still a number of "challenging issues to work through", Lewenza said in a statement he was optimistic that the union will be able to reach agreements with GM and Chrysler.

Chrysler, which has the largest production footprint of the Detroit Three in Canada, has expressed concern about the Ford pattern because Ford has the smallest footprint, and therefore arguably the least to lose.

Contract talks between the union and car companies have been taking place for more than a month at a downtown Toronto hotel. An unprecedented simultaneous strike at all three automakers was averted on Monday when an agreement was reached with Ford hours before the strike deadline.

Talks have been tough because the automakers have been adamant that costs in Canada, which they say are the highest in the world, must come down. The union, having made concessions during the recent recession, wants to share in the spoils of the profits once again being made by the Detroit Three.

Pattern bargaining, under which an agreement with one automaker becomes the template for deals with the others, is a long-standing strategy in auto talks, meant to ensure that no company has a labor cost advantage over the others, the CAW has said.

The Ford agreement also includes a clause to move new hires to a hybrid pension plan that mixes defined benefit and defined contributions. Wages for existing members will remain frozen for three years but the agreement does include lump sum bonuses in each year.

(Reporting By Nicole Mordant in Vancouver; additional reporting by Allison Martell in Toronto; Editing by Peter Galloway)