Canadian Auto Workers union, GM agree on contract

CAW President Buzz Hargrove said they have an agreement in principal with Chrysler but are just trying to work out the final language. "We're very close," Hargrove said.

Hargrove said GM workers will get no wage increases for three years but will see cost-of living improvements in the second and third years of the contract.

He said he also received a commitment from GM on investments to produce new vehicles at a plant in Oshawa, Ontario, a key demand.

The current contracts covering about 22,000 GM and Chrysler workers expire in September. Any new contracts would need to be ratified with a vote by the membership.

Hargrove said the membership will vote on the GM deal on Friday.

"We put together an excellent agreement for our membership in what is a very difficult time for the corporations and the industry," Hargrove said.

A surprise early deal with Ford Motor Co. last month kept that company's labor costs essentially the same as they are now, the union said. It froze base wages and pension costs and buys the CAW out of one week of vacation, Ford said.

But the contract did not gain Ford what it and the other automakers got from the United Auto Workers in the U.S. last fall -a lower-tier wage for new hires of around $14 per hour, about half that of a current UAW production worker.

Industry analysts have said Ford settled early to avoid a strike at its Oakville, Ontario, factory, which makes the strong-selling Ford Edge and Lincoln MKX crossover vehicles that are important to Ford's cash flow.

Canada's auto industry long had an advantage over the U.S. industry because Canada has free health care and the Canadian dollar was weak, but those advantage no longer exist as the Canadian dollar is almost at par with the U.S. dollar.

Ken Lewenza, head of CAW's Chrysler bargaining team, called negotiations tough late Wednesday.

"We're not dealing with companies that have a lot of cash here. We're dealing with companies that are in market decline," Lewenza said.

GM recently announced the closure of a plant in Windsor, Ontario. About 1,400 workers will lose their jobs. GM also recently announced 900 job losses at a plant in Oshawa, Ontario.

Ontario Premier Dalton McGuinty said he is prepared to give GM more taxpayers' money for new projects, despite the layoffs.