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Newly assembled 2013 Ford Escapes sit on plant lots ready to be shipped out to dealers at the newly transformed Louisville Assembly Plant in Louisville, Ky. (JOHN SOMMERS II/REUTERS)
Newly assembled 2013 Ford Escapes sit on plant lots ready to be shipped out to dealers at the newly transformed Louisville Assembly Plant in Louisville, Ky. (JOHN SOMMERS II/REUTERS)

CAW says union will reject Detroit Three's ‘overzealous’ cuts Add to ...

The Canadian Auto Workers fired another salvo at the Detroit Three auto makers, saying the union will reject the cuts in wages and benefits being demanded by the companies.

“Right now they’re incredibly overzealous,” CAW president Ken Lewenza said Monday, a week before a deadline for a strike that would halt production at the Canadian operations of one or all of the companies.

“All they keep throwing at us is the UAW agreement – UAW agreement, UAW agreement. They don’t know we’re not in the UAW yet,” Mr. Lewenza said after the union issued a bulletin to members outlining company proposals that would eliminate cherished union benefits.

The union and Chrysler Group LLC, Ford Motor Co., and General Motors Co. are at odds over how to reduce Canadian hourly labour costs so they match those at the three companies’ plants in the United States, which are represented by the United Auto Workers.

The notice to CAW members said the auto makers want to eliminate the defined benefit pension plan for all workers, permanently end cost-of-living increases and reduce other benefits, including access to prescription drugs.

Other demands include the end of a clause that permits workers with 30 years experience to retire with a full pension and a permanent two-tiered wage system similar to the one that covers UAW workers.

“All three bargaining committees are determined to reject these demands,” the document said.

Mr. Lewenza warned when negotiations opened last month that if the companies maintained an “overzealous” posture, it would be difficult to reach an agreement by the Sept. 17 strike deadline.

As of Monday, the union was still preparing for a strike that would shut all three auto makers, choking off the supply of such key products as Chrysler’s minivans and large sedans, Ford’s Edge, Flex and other crossovers and GM’s Cadillac XTS, a new model for the auto maker’s luxury brand.

A two-week strike would strip two percentage points from Ontario’s economic growth and about 0.8 percentage points from Canada’s gross domestic product in the month it occurs, said Douglas Porter, Bank of Montreal’s deputy chief economist. Production could be recouped later with overtime, Mr. Porter said.

Chrysler Canada Inc. spokeswoman LouAnn Gosselin said the company would not comment on the bulletin.

Sergio Marchionne, Chrysler Group’s chief executive officer, told The Globe and Mail on Friday that a deal that does not reduce costs in this country to the level of U.S. hourly costs would restrict capital investment in Canada, and that would likely be the case for all three auto makers.”

“Nobody would do this,” Mr. Marchionne said.

Ford Motor Co. of Canada Ltd. spokeswoman Lauren More said the company is open to discussing any proposal that will improve cost competitiveness.

Mr. Lewenza said the companies can reduce their labour costs in Canada by increasing the capacity utilization of their operations here.

“They have clearly told us ‘you guys have got to position yourselves for future investments because all facilities need upgrading,’” he said. “We get that.”

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