The Auto Writer

Chrysler will be meeting with Canadian Auto Worker representatives to hash out a revised labor agreement. Will the CAW relent? If not, will Chrysler shut down its Canadian operations completely?

Chrysler Has Little To Lose In Union Negotiations

If you think that the United Auto Workers can be a tough force to reckon with, then you aren’t all that familiar with the Canadian Auto Workers (CAW) union.

The CAW typically takes a hard line when negotiating with General Motors, Ford and Chrysler, insisting on all the perks received by their American brethren and then some. Indeed, the CAW was at one time part of the UAW but split over pay, healthcare and other benefits.

GM Strikes A Deal With The CAW

General Motors recently came to terms with the CAW in a bid to win concessions from its Canadian workforce.  That deal, which received 87% approval from rank and file members, freezes pay for several years. However, it is contingent on GM receiving provincial (Ontario) and federal bridge loans to help keep GM in business.

As part of its own restructuring effort, Chrysler will be holding negotiations with the CAW too. In advance of their discussions, Chrysler says that the deal GM set up with the Canadian union doesn’t go far enough. In fact, if Chrysler isn’t able to get what they want, they’ll consider shutting down Canadian production. Permanently.

Chrysler Looks Beyond Canada For Help

With very little to lose — America’s number three automaker will most certainly R.I.P. if it cannot gain federal support for its proposed alliance with Fiat — Chrysler could make good on shutting down its Canadian factories.

Chrysler has asked Canada for US$2.3 billion in loans  and wants to close the labor cost gap with Toyota and Honda. Chrysler says that its Canadian workforce carries a $20/hour premium over comparable Canadian workers at Toyota and Honda plants and is looking for concessions that will shrink that difference.

In a talk before a committee of the Canadian House of Commons, Chrysler LLC president Tom Lasorda said that the company, “…cannot afford to manufacture products in a jurisdiction that is uncompetitive, relative to other jurisdictions. Currently Chrysler CAW (Canadian Auto Workers) are not competitive.”

Chrysler Canada is headquartered in Windsor, directly across from Detroit in Ontario. One assembly plant is located in that city and builds the Chrysler Town & Country, Dodge Grand Caravan and Volkswagen Routan minivans.  A second plant is Brampton which is tasked with building the Dodge Challenger and Charger, and all Chrysler 300 models. A third plant, Etobicoke, is scheduled to be closed in 2011 and for die casting of engine and transmission parts.