Toronto, Ontario – The Canadian Auto Workers Union (CAW) has reached a tentative agreement with Chrysler on concessions that will help the automaker save approximately $240 million annually and possibly avoid bankruptcy filing.
“We are extremely grateful to the CAW leadership and to its hard-working members for their openness in this challenging environment to create a new strategy that will lead this company on a path to success,” said Tom LaSorda, Chrysler vice-chairman and president. “We also want to recognize the Canadian Federal and Ontario governments for their energy and efforts in helping to move this great company forward.”
In a statement, Al Iacobelli, chief bargainer and vice-president of Chrysler employee relations, said that the tentative agreement also helps move the company one step closer to a partnership with Fiat.
Automotive News reported that in exchange, Chrysler and potential partner Fiat agreed to keep its two Canadian assembly plans open even if bankruptcy is unavoidable. Chrysler had earlier threatened to close the plants and move production if concessions were not made.
The agreement keeps wages intact at about $35 per hour, but the union gave up break time, bonuses, tuition reimbursement, semi-private hospital rooms, and some supplemental pay, and has agreed to institute Fiat’s manufacturing processes. Students earning considerably less than veteran workers will be allowed to work additional hours at the plants.
A retiree health care trust will be created, similar to the Voluntary Employee Beneficiary Associations negotiated by the United Auto Workers Union (UAW) in 2007. CAW president Ken Lewenza said that terms need to be ironed out, but Chrysler has agreed to capitalize the fund to support the benefits negotiated.