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Strike puts Chrysler's Marchionne on the offensive

Chrysler Group CEO Sergio Marchionne answers questions after announcing Chrysler will move some of its employees into Detroit's historic Dime Building and rename it Chrysler House, April 30, 2012.


A strike that shut down the Chrysler Group LLC minivan plant in Windsor, Ont., ended shortly after it began, but it lasted long enough for chief executive officer Sergio Marchionne to warn that it's a bad sign ahead of contract talks between the car company and the Canadian Auto Workers union.

A strike by CAW members at Dakkota Integrated Systems LLC in Windsor led to the cancellation of a shift Monday at the minivan plant.

"This is not the way to get things done," Mr. Marchionne was quoted as saying by industry trade publication Automotive News.

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"If this is an indication of an administration of the willingness of … our friends on the other side of the border to carry on … then we'll move forward and I think we'll have a very difficult time in negotiations."

The Chrysler CEO has already angered the CAW by saying last fall that Canadian wage rates are uncompetitive. Other senior executives of the Detroit Three have made similar comments about hourly labour costs being higher in Canada than at U.S. plants staffed by members of the United Auto Workers union.

The CAW disputes that contention and insists its members will reject company demands calling for profit sharing instead of annual wage increases – something the UAW has accepted – which sets the stage for a arduous set of negotiations this fall.

Mr. Marchionne made his remarks before workers at Dakkota – who make instrument panels for Chrysler Town and Country, Dodge Caravan and Volkswagen Routan minivans – held a second vote on a tentative contract they originally rejected on Sunday. They approved the agreement with 75 per cent of the votes and returned to work Monday afternoon.

CAW president Ken Lewenza was unhappy about Mr. Marchionne's comments.

"I'll have to talk to Sergio about the content of his terminology because the reality is that since the rejection of the tentative agreement, the CAW representatives have been working around the clock trying to find a resolve," Mr. Lewenza said.

"Any time a CEO doesn't give the community and the union credit for resolving an issue, but becomes aggressive, I don't think it's helpful moving forward and I'll have to deal with Mr. Marchionne on that."

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Mr. Lewenza said he hopes the mutual respect that has developed since the Italian-Canadian CEO led Fiat SpA to take a controlling stake in Chrysler in 2009 will pay dividends when it comes to negotiations on a new contract this summer and fall.

"This company wasn't turned around just because Sergio Marchionne became the CEO," Mr. Lewenza said in Toronto after meeting with Ontario Economic Development Minister Brad Duguid to discuss the CAW's call for a national automotive strategy.

The new contract at Dakkota calls for wages for assemblers to increase 9 per cent over the next three years to $18.50 an hour from $17.50. They will also receive a $500 signing bonus.

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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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