CAW, Big Three face tough talks

[pupp1]

Sunday, May 29, 2005



CAW, Big Three face tough talks



By Brett Clanton / The Detroit News
The Canadian Auto Workers couldn't ask for a gloomier bargaining environment as it prepares to sit down with Detroit automakers this summer and hammer out a new wage and benefit agreement.

Sales and profits at General Motors Corp. and Ford Motor Co. are slumping, and the two automakers are redoubling cost-reduction efforts. DaimlerChrysler AG's Chrysler Group is back in the black but has yet to recapture the big profits of the late 1990s.

The favorable currency exchange rate that once made Canada an attractive place for Detroit automakers to invest is gone. And the ranks of CAW members working in Big Three factories have dropped to 41,800 from 44,000 in 2002.

Detroit automakers say rising labor costs in Canada are making the region uncompetitive and hindering efforts to match the productivity of lower-cost Asian rivals.

While the CAW plans to seek another round of wage and benefit gains, Detroit automakers will push for concessions. The talks are expected to be the most contentious in years and could be a harbinger of what's to come when the United Auto Workers and Detroit automakers return to the bargaining table in 2007.

CAW President Basil "Buzz" Hargrove says his members won't accept wage or benefit cuts simply because the Big Three are financially weaker.

"Our plants are highly productive. They're good quality, they're low cost, and our members work their butts off," he said. "Every three years, we get a chance to see that they share in the rewards of that, and we intend to do that in our bargaining this fall."

The CAW opens negotiations with Detroit automakers July 19 in Toronto. The current contract expires Sept. 20.

Chrysler is emerging as the likely target to set the pattern agreement because it appears to be in the best position to boost wages and benefits. Yet Chrysler says the CAW should not expect the kind of gains it made in 2002 when the last contract was ratified.

Chrysler plans to press the union for lower annual wage increases with an eye toward moving its Canadian workers closer to those paid by foreign automakers in North America, often referred to as "transplants."

"At the end of the day, our goal is going to be to narrow the gap with transplant automakers," said David Elshoff, a Chrysler spokesman. "Labor costs (in Canada) continue to grow at an unsustainable rate."

Chrysler says wages and benefits for its Canadian work force average $51.05 per hour and have been growing at a 5.8 percent annual clip. That's far above the 2.4 percent annual wage growth at North American factories operated by Toyota and Honda and also exceeds the 4.9 percent annual growth rate at Chrysler's U.S. plants.

Chrysler says the $4-per-hour cost advantage it once enjoyed in Canada -- thanks to favorable exchange rates and government health care -- has become a $9-per-hour disadvantage compared with foreign-owned factories in North America. The automaker attributes the increase largely to rising compensation costs and a rise in paid time off.

Chrysler is seeking to reduce the 56 days a year of paid time off that hourly workers in Canada receive on average, far more than their U.S. counterparts.

Pensions, which the CAW negotiates every six years, may prove an especially hard-fought battle this year with retiree benefits under fire across all industries. Chrysler also will push for a reduction in job classifications among skilled trades workers to gain efficiencies at its two Canadian plants.

CAW leaders argue Detroit automakers are burdened less by labor costs than by unfair trade policies that allow Asian automakers to flourish in North America but restrict entry of U.S. automakers into Japan, South Korea and other Asian markets. They also challenge assertions that Canadian labor costs are out of control.

"The (automakers are) making the argument in terms of cost, and we're saying that's not the issue," Hargrove said.

"Labor costs as a percentage of the price of a vehicle are actually lower than they were 20 years ago." They represent between 10 percent and 13 percent of a vehicle's cost, compared with 25 percent in the 1960s, he said.

Jim Stanford, the CAW's economist, said that despite the Canadian dollar's appreciation against the U.S. dollar, Canada still enjoys about an $8-per-hour cost advantage, he said.

In large part, that's because Canada's public health care system saves automakers millions of dollars. While the Big Three spend roughly $1,500 per vehicle on health care for U.S. workers, they spend about $120 per vehicle in Canada, Stanford said.

The CAW says it's justified in asking for better wages and benefits because the Big Three's downsizing efforts in recent years, coupled with relentless demands for better productivity, are putting a strain on many workers.

"Sometimes you think you need eight arms to keep up," said Richard Labonte, 35, who installs seat belts at Chrysler's Windsor assembly plant. The plant is running three production shifts, and workers frequently log overtime to build Chrysler minivans and the Pacifica crossover wagon. "We want them to prosper, but at the same time, it's getting to be a little too much."

The Big Three's Canadian plants have ranked among the industry's best in productivity in recent years.

But the recent weakening of the Canadian dollar and rising cost of labor are beginning to erode the gains, said Dennis DesRosiers, president of DesRosiers Automotive Consultants in Toronto. "We now have a significant disadvantage on the wage front. That makes these negotiations very critical."

Last year, Ontario surpassed Michigan in annual vehicle production for the first time -- signaling the region's growing importance.

While the Big Three have reduced the number of Canadian plants from 10 to seven in the past three years, each company has made sizeable investments to expand or update operations.

Yet labor costs are becoming a bigger issue.

"We cannot continue on the trend line that we're on right now," said Stew Low, a GM Canada spokesman. "We certainly expect employees to do better each year, but we have to contain those costs and flatten that growth curve to have a more competitive agreement."

Leon Rideout is preparing for a long battle at the bargaining table. The chairman of CAW Local 1285, which represents Chrysler workers at a plant in Brampton, Ontario, said he hasn't seen a more difficult climate for negotiations since Chrysler was in danger of going bankrupt in the early 1980s.

"We're gearing up for it," he said, "but we know it's going to be a tough one."
Source

[ByTheLake]

The UAW and CAW have an opportunity to prove that they are interested in the long-term stability of the Big 3. If the unions maintain their traditional hard-line positions, the automakers have little choice but to send manufacturing work elsewhere simply to survive.

Although I love them to death and they work hard, my UAW family & friends in Michigan live like kings. With the market becoming more global over time, this cannot be maintained. Time for a dose of reality.

[SSrevolution]

This wouldn't be the first time they faced tough talks. What about the Ste. Therese F-body scandal?

[lineworker]

Originally Posted by ByTheLake

The UAW and CAW have an opportunity to prove that they are interested in the long-term stability of the Big 3. If the unions maintain their traditional hard-line positions, the automakers have little choice but to send manufacturing work elsewhere simply to survive.

Although I love them to death and they work hard, my UAW family & friends in Michigan live like kings. With the market becoming more global over time, this cannot be maintained. Time for a dose of reality.

LIVE LIKE "KINGS",WHAT IS YOUR DEFINITION OF LIVING LIKE KINGS???I AM VERY THANKFUL FOR MY JOB AT GM, I GO TO WORK EVERY DAY AND WORK 8-10 HRS A DAY, AND I EARN EVERY PENNY. I HAVE A MORTAGE ,CAR PAYMENT,AND I AM RAISING A KID JUST LIKE EVERBODY ELSE. I AM NOT RICH BY ANY MEANS. AFTER I PAY JUST NORMAL BILLS I DON'T HAVE PILES OF MONEY LAYING AROUND, EVEN THOUGH MOST PEOPLE ON THIS WEBSITE THINK WE DO.

[tgagneguam]

As mentioned previously, market forces will ultimately determine whether or not the wages and benefits paid to assembly-line workers and management at the Detroit automakers are fair. People can get as passionate as they want about the issue, but if people stop purchasing cars because the burden each vehicle needs to carry in terms of compensation for workers is too rich, then those wages will be lowered one way or another. Is one worker worth $9/hour more than a similar worker at another company? My guess is no, and I cannot see how that can last. It's funny how no one really seems to be able to justify that difference beyond "I work hard." Sure, and so does everyone else in every other industry. So what's the convincing justification? Again, do these people possess skills that are in demand and that cannot be replicated elsewhere for cheaper? If the answer to even one of those questions is "no," then you have a situation where people are ultimately going to be unemployed. It's unfortunate, cuz it would suck for people to lose their jobs. But to not really even be able to consider that possibility is really painfully naive.

Let me be clear: I don't revel in the idea of purchasing foreign or non-unionized products. However, I do like to make my dollar stretch further, and sometimes that means purchasing non-unionized or foreign products. I'm quite certain looking around any union worker's home will demonstrate the abundance of similar foreign or nonunion-made products. And quite honestly, simply making a product with the union label or made in the USA is not at all a compelling argument for me to purchase something.

[dindak]

Hopefully Buzz and the boys will be cool about it and not hurt GM more with a strike.

GM and Ford deserve a few breaks this time around, times are tuff.

[ByTheLake]

Originally Posted by lineworker

LIVE LIKE "KINGS",WHAT IS YOUR DEFINITION OF LIVING LIKE KINGS???I AM VERY THANKFUL FOR MY JOB AT GM, I GO TO WORK EVERY DAY AND WORK 8-10 HRS A DAY, AND I EARN EVERY PENNY. I HAVE A MORTAGE ,CAR PAYMENT,AND I AM RAISING A KID JUST LIKE EVERBODY ELSE. I AM NOT RICH BY ANY MEANS. AFTER I PAY JUST NORMAL BILLS I DON'T HAVE PILES OF MONEY LAYING AROUND, EVEN THOUGH MOST PEOPLE ON THIS WEBSITE THINK WE DO.

I mean relatively speaking. My uncle, for example ... barely a high school education, makes $100k a year on a GM engine line fixing tooling when it breaks down. No kids, so he collects antique cars and very fast motorcycles. Huge home in an upscale neighborhood. All because he can fix air tools.

He works a lot of hours, so I don't take that away from him. The hours he works, I'm sure, are a factor in his take-home pay.

My question is this ... how many people would be willing to perform his work on the engine line for half of his pay? I'd bet quite a few.

[lineworker]

Originally Posted by ByTheLake

I mean relatively speaking. My uncle, for example ... barely a high school education, makes $100k a year on a GM engine line fixing tooling when it breaks down. No kids, so he collects antique cars and very fast motorcycles. Huge home in an upscale neighborhood. All because he can fix air tools.

He works a lot of hours, so I don't take that away from him. The hours he works, I'm sure, are a factor in his take-home pay.

My question is this ... how many people would be willing to perform his work on the engine line for half of his pay? I'd bet quite a few.

I do make half of what your uncle does, I also pay $60.00 everytime I go to the doctor up from $30.00,all other things at the Dr. office is up also,so We do pay more for our health care. Everybody who *itches about how much GM employees make, you sure wouldn't tell them No if they hired you, you would be lieing if you did say NO.

[lineworker]

Originally Posted by ByTheLake

I mean relatively speaking. My uncle, for example ... barely a high school education, makes $100k a year on a GM engine line fixing tooling when it breaks down. No kids, so he collects antique cars and very fast motorcycles. Huge home in an upscale neighborhood. All because he can fix air tools.

He works a lot of hours, so I don't take that away from him. The hours he works, I'm sure, are a factor in his take-home pay.

My question is this ... how many people would be willing to perform his work on the engine line for half of his pay? I'd bet quite a few.

Does your uncle know how you feel about him, We work to buy things,now according to you, a person can't buy the things that they want. And where do you work????

[ByTheLake]

Originally Posted by lineworker

Does your uncle know how you feel about him, We work to buy things,now according to you, a person can't buy the things that they want. And where do you work????

I'm not sure how you're drawing your conclusions ... nothing in either of my posts indicates that "a person can't buy the things that they want."

My statements are pointed at the value of labor. I admit, I get by quite well and have two homes, but I've spent over 12 years in college and have spent countless years doing homework and research until 2AM.

Most union folks I know (friends & family) have similar lifestyles ... and here's my point, just so you're clear this time ... the unions artificially inflate the market rate of labor. I am non-union management, and my salary is based on what the market will pay for a person with my skill set and training. That is not the case for the union folks ... there is no assessment of the fair market value of the labor.

So, with labor rates artificially high in the US and Canada, the Big 3 have no choice but to send manufacturing work outside North America ... not by choice, but simply to survive.

Will there by any Big 3 auto assembly jobs in North America in 50 years?

[revrnd]

Originally Posted by ByTheLake

I mean relatively speaking. My uncle, for example ... barely a high school education, makes $100k a year on a GM engine line fixing tooling when it breaks down. No kids, so he collects antique cars and very fast motorcycles. Huge home in an upscale neighborhood. All because he can fix air tools.

He works a lot of hours, so I don't take that away from him. The hours he works, I'm sure, are a factor in his take-home pay.

My question is this ... how many people would be willing to perform his work on the engine line for half of his pay? I'd bet quite a few.

He a skilled tradesman! I'm a tool & diemaker & could work & make that kind of coin too. But I enjoy my weekends. Unfortunately the General scheduled this past Saturday dayshift & next Saturday NIGHTSHIFT for my enjoyment. For the most part I only work the scheduled production OT.

Your beef is similiar to the lineworkers. "You guys make more than us, but do nothing but sit on your butt." Maybe if you're on line coverage, but if a machine, press or fixture breaks, you have the skills to fix it. I'm in a crib that you are repairing equipment 5 days a week on 3 shifts. No azz time for us.

[timman]

Originally Posted by ByTheLake

I'm not sure how you're drawing your conclusions ... nothing in either of my posts indicates that "a person can't buy the things that they want."

My statements are pointed at the value of labor. I admit, I get by quite well and have two homes, but I've spent over 12 years in college and have spent countless years doing homework and research until 2AM.

Most union folks I know (friends & family) have similar lifestyles ... and here's my point, just so you're clear this time ... the unions artificially inflate the market rate of labor. I am non-union management, and my salary is based on what the market will pay for a person with my skill set and training. That is not the case for the union folks ... there is no assessment of the fair market value of the labor.

So, with labor rates artificially high in the US and Canada, the Big 3 have no choice but to send manufacturing work outside North America ... not by choice, but simply to survive.

Will there by any Big 3 auto assembly jobs in North America in 50 years?

I'll bet there is somebody in China that will do your job for 1/3 of what you make.

[Laffer98]

Originally Posted by ByTheLake

I mean relatively speaking. My uncle, for example ... barely a high school education, makes $100k a year on a GM engine line fixing tooling when it breaks down. No kids, so he collects antique cars and very fast motorcycles. Huge home in an upscale neighborhood. All because he can fix air tools.

He works a lot of hours, so I don't take that away from him. The hours he works, I'm sure, are a factor in his take-home pay.

My question is this ... how many people would be willing to perform his work on the engine line for half of his pay? I'd bet quite a few.

Have you told your Uncle how you feel?

[Laffer98]

What happen to the days when people earned a decent wage, and aspired to have a nice home, car and family? Now we worry the other guy might be taking home a decent wage (more than we get) and we want to make sure he doesn't get it. What a crock! Labor rates because of freetrade will eventually settle out to about $9.00 an hour here in the U.S. When it does, it WILL effect everyone. The top 5% will benefit greatly the bottom 95% will be in line for the gr eastest grin and bear it contest. Young people these days think it would be great to see some retired person loose their benefits, pension, etc... they worked 30 plus years to obtain. They also think it would be great if social security went bankrupt and shafted those same workers too. I don't get it, we used to pull together to help everyone better themselves now with free trade it's dog eat dog, and make sure you take it away from my uncle, brother, neighbor, because he don't deserve no more because I say so! I know what's going on, everyone does if they would just admit to themselves. Generation after generation people improved their lot in life now it's being taken away and the young people have nothing to look forward to. So a lot of people are bitter. Be bitter at the ones that deserve it is all I ask, the politicians who have sold the American Dream off to the highest bidder and the elitist top 5% who bought those politicians so they could continue lining their pockets at your expense!

Wake Up America, it's not your uncle, your Aunt, or your neighbor, brother, or sister who happens to be earning a decent wage that's your enemy, it's the leaches sucking off those that are not!

[gilli77]

One thing to take in to consideration here is the fact that the CAW and the big three generally have a better relationship than the UAW and the Big three. I don't think that the CAW is going to be shooting the moon in terms of wages but instead will look to improve benefits, and job security. With most of the Big three announcing very big projects up coming in ontario, there is a commitment from the auto manufacturers to the CAW, negotiations should not be that difficult.