RPT-CAW, Chrysler still far apart in contract talks, union says

* CAW says talks "incredibly far apart"

* CAW says Chrysler wants to cut cost of living increase

TORONTO, Sept 25 (Reuters) - The Canadian Auto Workers union remains far apart from Chrysler Group LLC in talks over a new contract, with Chrysler wanting to eliminate a cost of living increase and adjust lump sum payments negotiated with General Motors and Ford last week, the head of the union said on Tuesday.

Fiat SpA's Chrysler is the last of the Detroit 3 automakers without a contract. Ford workers ratified their deal last weekend and GM employees vote on Wednesday and Thursday.

"We're still incredibly far apart," CAW President Ken Lewenza said after a morning meeting the union's Chrysler caucus. "It is a tug of war, quite frankly."

The union has yet to see a formal economic proposal from Chrysler, which Lewenza said he will push for today.

Chrysler declined to comment.

The union said Chrysler wants to remove a cost of living increase, set for the final year of the framework deal, and wants to find a way to offset a 33 Canadian cent an hour pay increase introduced in the last quarter of the current contract.

Chrysler, which has more than 8,000 unionized workers in Ontario, also wants flexibility over the timing and structure of C$9,000 ($9,200) in lump sum bonus payments, the CAW has said.

The cost of living increase and bonus payments were established in a framework deal with Ford, which set the pattern for talks with GM and Chrysler. Pattern bargaining is a union strategy mean to ensure that no company has a labor cost advantage over the others.

"Our intent is to make sure that we follow pattern and I understand that pattern is all a part of cost, and again that could include splitting up payments, but that's not our intent," said Dino Chiodo, chairman of the CAW's Chrysler master bargaining committee.

"We're doing everything we can to make sure that we maintain a collective agreement that looks almost identical to what was established at Ford and GM."

Under the framework deal, new hires will start at a lower wage, earning 60 percent of the highest hourly rate of C$33.85, down from 70 percent previously. It will take 10 years to reach top pay, up from six years.

New employees will also have a hybrid pension plan, that mixes a defined benefit and defined contribution plan. The defined contribution plan for current employees was unchanged.

The union, which has said it could give 24 hours notice of a strike if the talks stall, continues to meet with Chrysler at a downtown Toronto hotel.

"In terms of giving them strike notice, no I'm not there yet. But I may be forced to do that this week," Lewenza said.