CAW deal saves Ford labor costs

DETROIT (Reuters) - The deal reached between the Canadian Auto Workers and Ford Motor Co (F.N) last week cut around C$4 to C$5 an hour from the labor costs of Ford's Canadian workers, Ken Lewenza, president of the union, said on Wednesday.

During the negotiations, Ford said it needed to bring its Canadian labor costs into line with those in the United States or future investments in Canada would be jeopardized.

"Ford said they were at a disadvantage," said Lewenza at the Reuters Auto Summit. "We gave them the exact same deal we gave Chrysler and General Motors GM.UL."

GM and Chrysler, which reached agreements with the CAW in the spring, needed steep concessions to qualify for billions of dollars in government aid in order to survive the industry downturn.

Ford was the only one of the Detroit-based automakers not to seek a government bailout and was the only one of them not to restructure through bankruptcy.

Lewenza said that left Ford with a big pile of debt that the other two automakers no longer have to deal with.

It also left Ford with less cash on hand, so the company was not able to take part in a healthcare trust for retirees with the union, a move that took a big chunk of cash off the books for GM and Chrysler.

Had Ford been able to make the investment in the healthcare trust, the amount taken off of its books related to Canadian labor costs would have been closer to around C$18 an hour, which would have been more in line with the Chrysler and GM deals.

"When we went to Ford, they didn't have any cash to put into the healthcare trust and we would not agree to take it in stock. We needed hard cold cash, similar to what we did at GM and Chrysler," Lewenza said.

The deals at all three companies included cuts to benefits, a reduction in vacation and break times and an increase in employee payments on health care.

During the negotiations Ford said it would be closing its St. Thomas, Ontario large-sedan assembly plant in 2011, eliminating 1,400 jobs.

Looking to GM, Lewenza said he was "frustrated" by the decision of the company to cancel its tentative agreement to sell a majority stake in its Opel business to a consortium led by Canada's Magna International (MGa.TO).

"This is another signal, quite frankly, that maybe the lessons of the past aren't totally incorporated in the hearts and minds of the (GM) board of directors and others, because this has been going on for seven or eight months and (was nearly) finalized twice," he said.

"At the end of the day, if it means success for General Motors, in terms of ... enhancing sales throughout the world, then I think that it might make sense."

Lewenza also said he was excited by developments with Chrysler and with Fiat's (FIA.MI) plans to rebuild that company.

He said Fiat Chief Executive Sergio Marchionne had told him that the Chrysler minivan, built in Windsor, Ontario, is important to the company.

"That was music to our ears because that's a three-shift operation," said Lewenza.

He added that Fiat may look beyond building Chrysler vehicles in Canada and that it could begin producing Fiat products there.

"He (Marchionne) left me that impression that there's that potential there."

($1=$1.06 Canadian)

(For summit blog: blogs.reuters.com/summits/)

(Reporting by John McCrank; Editing by Phil Berlowitz)