Behind Canadian Auto Workers settlement

Last year the United Auto Workers union signed four-year contracts with General Motors, Ford and Chrysler. These contracts went further than any in the union’s 77-year history in rolling back gains of past struggles. To win approval, UAW leaders claimed that the alternative would be a long strike at Ford or the imposition of a worse contract by an arbitrator at the other two, where workers are contractually barred from striking. A sizable percentage of workers — about a third at Ford and GM and almost half at Chrysler — voted “no.”

Autoworkers on both sides of the Canada-U.S. border were hoping to see the Canadian Auto Workers union take a stronger stand and oppose concessions in this year’s negotiations. They hoped that a permanent two-tier pay scale would be kept out of the Canadian agreements. This would put pressure on the companies and the UAW to get rid of two-tier in the U.S. when new negotiations begin in 2015.

Workers, especially at Chrysler, wanted all three companies to be held to the same “pattern” agreement. In the U.S, Chrysler-Fiat CEO Sergio Marchionne cried poverty; Chrysler workers did not get “inflation protection” bonuses, which were smaller at GM than at Ford. These were granted in lieu of the cost of living allowance, which was “suspended” in the 2009 bankruptcy agreement and eliminated last year. UAW members were hoping the CAW would not give up COLA.

The bosses took a hard line. “From a labor cost perspective, Canada’s the most expensive place in the world to assemble a vehicle,” said GM Canada’s head of labor relations, David Wenner. Detroit and Canadian news media repeatedly presented GM’s position — that labor costs in Canada were “uncompetitive” — as fact. The impression was that Canadian autoworkers were greedy, and their greed was the cause of inflated labor costs in Canadian plants. (CBC News, Sept. 17)

What did CAW members do to become so overpaid? Nothing really. In fact they gave concessions in 2009 when the Ontario provincial and Canadian governments joined the U.S. in bailing out Chrysler and GM. The CAW took a step toward permanent two-tier pay by giving the companies six years to bring new hires to top rate.

It is rarely mentioned that CAW members gave up a week’s paid vacation. At Chrysler, which has the largest percentage of workers in Canada, this is like giving the company more than 8,000 weeks or 1.3 million hours free labor per year. That’s enough to build more than 45,000 vehicles!

Stop ‘team play’ with capitalists

When in 1985 CAW broke away from the UAW and resisted concessions, labor costs were cheaper in Canada. The Canadian dollar was weaker and lower health-care costs were an incentive to invest in Canada. The CAW negotiated more per hour based on higher taxes and living expenses. Now the exchange rate between U.S. and Canadian dollars is about even, so the hourly wage of $34 Canadian costs more than the $28 U.S. for first-tier production workers.

Health-care costs for retirees — who greatly outnumber UAW active members — were unloaded in 2007 to a separate fund with a fixed, one-time contribution. The introduction of permanent two-tier pay in 2007, its expansion in 2009 and its continuation in 2011 have brought the average hourly U.S. wage down dramatically. None of this is the fault of Canadian autoworkers.

CAW’s figures showed Canadian labor costs were only 5 percent higher compared to those in the U.S. and only 4.2 percent of production costs. Yet CAW negotiators went to the table “with very modest expectations,” according to Secretary-Treasurer Peter Kennedy. They made “very modest” demands on companies that were making billions in profits, with Ford and GM breaking records. CAW did not ask for raises or for the restoration of lost vacation time. Like the UAW, CAW offered proposals to help the companies avoid “fixed costs.” (CBC, Sept. 17)

Despite that, CAW contracts are better than the UAW’s. Chrysler and GM were held to the pattern set at Ford. COLA was not eliminated and new hires still eventually get top rate. However, the agreements contain no gains. Base pay is frozen for four years, and COLA is suspended until the last quarter of the four-year pact. New hires begin at 60 percent of base pay — more than any U.S autoworker hired after 2007 — but need six years to reach 70 percent and 10 years to make top rate. As new hires replace workers who retire, some workers will always make less than others for the same work.

Nevertheless, UAW members are seeing the Canadian contracts as reason to make progressive demands on the Detroit Three in 2015 — such as abolishing two-tier, restoring COLA and no special treatment for Marchionne.

Both unions’ orientation — toward a partnership with capital — is the major obstacle for workers wanting a bigger share of the wealth they create. An ideological shift at the top in an anti-capitalist direction is not going to happen in the near future. Workers on the line need to develop a militant strategy to restore hard-fought gains. It is time to quit the corporate “team” and start talking about picket lines, in-plant resistance and even occupations.

Grevatt has worked for Chrysler in the U.S. for 25 years.