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Chrysler contract deal possible today, CAW chief says

CAW president Ken Lewenza speaks at a press conference in Toronto Thursday September 20, 2012.

Aaron Vincent Elkaim/THE CANADIAN PRESS

The Canadian Auo Workers could reach a deal with Chrysler Group LLC as soon as Wednesday evening, CAW president Ken Lewenza says.

Mr. Lewenza said he and Chrysler's chief negotiator Al Iacobelli will have discussions today to "hopefully come to a conclusion."

The union scheduled an update on Chrysler negotiations for 9 p.m. ET Wednesday.

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He would not say what remains outstanding but sources close to the talks said Chrysler was told by the union to meet the pattern agreement ratified by Ford Motor Co. employees in Canada on Sunday or the union would serve the company with a 24-hour strike notice.

Sources said Chrysler was still resisting paying a $3,000 ratification bonus in one payment. The company was still hoping to break that into instalments.

"We're going to get a deal," Mr. Lewenza said. "I'm pretty confident."

He noted, however that there are some pieces outstanding and those pieces need to come together before a deal can be made final.

"One issue could sidetrack the whole thing," he warned in an interview in Oshawa, Ont., where General Motors of Canada Ltd. Employees began voting Wednesday morning on the deal the unon reached with that auto maker last Thursday.

In addition to the $3,000 signing bonus – which would cost Chrysler about $24-million, based on its unionized Canadian work force of about 8,000 people – the other companies agreed to pay bonuses of $2,000 to their unionized employees in each of the last three years of the deal.

One of the key cost-cutting clauses of the new contract is a reduction in hourly wages for new employees to about $20 from $24 now. It would take new employees 10 years to reach the highest wage level of $34 an hour, compared with the current six-year progression. But the union resisted demands that the wage for new employees remain at a lower tier permanently.

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Reduced benefits for newly hired employees will also reduce costs for the auto makers, including a change in the way pensions are financed.

Employees at the three auto makers hired before 2009 receive pensions that are funded entirely by the companies. The deal Chrysler officials are assessing now would require employees to contribute between 5 per cent and 6 per cent of their wages to their pension plans.

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About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More


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