CAW members to vote on Ford Canada deal on Sunday

TORONTO, May 2 (Reuters) - The Canadian Auto Workers union said on Friday its national bargaining committee voted overwhelmingly in favor of recommending union members accept a tentative three-year labor agreement with Ford Canada (F.N).

The agreement, which comes five months before the current contract expires, goes to a ratification vote on Sunday.

CAW President Buzz Hargrove said he believes the deal will go ahead and that he plans to meet with representatives of General Motors of Canada GM.N and Chrysler on Monday to try to get them to sign on to similar agreements.

Ford Canada said it would not comment prior to the ratification vote on Sunday on how much the new agreement might save the company. CAW Economist Jim Stanford has said it would save the struggling automaker "hundreds of millions of dollars."

Under the deal, workers would see their wages frozen for the entirety of the contract, they would get one week less paid vacation per year, cost of living increases would be suspended for five quarters, and they would see their health costs rise.

In return, they would receive a C$2,200 ($2,160) "productivity and quality" bonus. And to compensate for less vacation time, Ford is offering workers a one-time C$3,500 bonus in January.

The deal would also see Ford Canada's assembly plant in St. Thomas, Ontario, remain open until 2011. The plant, which produces the full-sized Crown Victoria sedan, had been scheduled to close in 2010.

Other details of the agreement include a cap on the cost of long-term care for retirees, and the CAW would look into the possibility of establishing a health-care fund similar to what the United Auto Workers union agreed to in the United States, which would shift more of the health-care burden to the union.

While the tentative contract avoids a two-tier wage system, like the one UAW agreed to last fall, it does make changes to the "new-hire grow-in system," in which new workers are hired below the base wage and then work their way up.

New hires would start at 70 percent of the base rate, and then be bumped up to 80 percent after one year, 90 percent after the second year, and 100 percent on their third year. Currently, new hires earn around 85 percent of the base rate and it only takes them two years to reach 100 percent.

Retirement incentives would be increased by around C$5,000 and those who take the package would qualify for C$35,000 towards the purchase of a new Ford vehicle. ($1=$1.02 Canadian) (Reporting by John McCrank; editing by Rob Wilson)