Labor & Employment Law

Chrysler Reaches Deal With the CAW

By Michael Fitzgibbon

The Canadian Auto Workers union has surrendered years of hard-won gains to keep the operations of Chrysler Canada Inc. from being liquidated in a likely bankruptcy protection filing by the troubled auto maker.

The groundbreaking concessions came after four days of tense, multiparty negotiations that involved the federal and Ontario governments and Italian auto maker Fiat SpA, would-be saviour of Chrysler LLC.

The CAW reports on the tentative deal on their website:

The agreement will result in over $240 million per year in annual cost savings for Chrysler's Canadian operations, as a result of a combination of benefit reductions, compensation changes, and increased productivity through operational improvements.  CAW members perform 12.5 million hours of work per year for Chrysler Canada.  The agreement therefore meets the benchmark for negotiations which was established by the federal and Ontario governments as a condition of their continuing support for the two companies.

The tentative agreement contains the GM concessions and, according to the CAW, the following:

• The elimination of semi-private hospital coverage.
• The elimination of a one-time $3,500 vacation buyout negotiated in 2008.
• The elimination of clawback reimbursement through the SUB program.
• The elimination of employee car purchase and tuition rebate programs.
• An increase in the waiting period for sickness & accident benefits.
• A reduction in the maximum dispensing fee for prescriptions.

These are extremely difficult times for everyone and, I'm certain, the CAW did not break easily from pattern bargaining.  Unfortunately, it remains to be seen whether this will be enough. 

Full post as published by Thoughts from a Management Lawyer on April 25, 2009 (boomark / email).