Unprecedented CAW deal freezes wages at Ford
Globe and Mail
April 28, 2008
The Canadian Auto Workers and Ford Motor Co. [F-N] have reached an unprecedented master agreement on a new contract — almost five months before the current deal expires — that freezes wages and reduces vacation pay, but which the union says beats back the two-tiered wage system introduced in the United States.
The union has agreed to the wage freeze, co-payments for prescription drugs and a system for newly hired employees that it says is not two-tiered, but calls for new employees to receive 70 per cent of regular base wages in the first three years of work as well as time-off provisions, cost of living adjustments and supplementary benefits that are phased in over three years. Wages for those employees will match those of existing employees after they have worked three years.
In addition, workers will have cost of living adjustments frozen from now until December, 2009, when those increases will resume.
Ford has agreed to pay each employee a $2,200 “productivity and quality” bonus when the agreement is ratified, compensate workers for reducing their vacation pay by 40 hours with a $3,500 cash payment in January, 2009, and index pensions to inflation for retirees in the second and third years of the agreement.
The auto maker’s assembly plant near St. Thomas, Ont., which was scheduled to be closed in 2010, will be kept open another year and the company has agreed to work with the union to find a new product to replace the gas-guzzling Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car full-sized cars produced there. The plant has been operating on one shift since last year.
The two sides reached agreement on the big-ticket items on a new three-year contract, but must now negotiate provisions on such local issues as health and safety provisions and clauses covering skilled trades workers before it becomes a tentative contract to be voted on by workers at all Ford’s CAW-represented plants in Canada.
The master economics agreement “will now become the centrepiece of all-out collective bargaining aimed at reaching a tentative agreement between the two sides later this week,” the union said in a statement issued Monday.
If a tentative agreement is reached and approved, the union will move on to negotiate with the Canadian units of Chrysler LLC and General Motors Corp. in traditional pattern bargaining during which a deal with one company becomes a template for contracts with the other two.
The deal was reached after the union had early meetings this spring with all three of the Detroit auto makers ahead of the expiry of the current contract this September.
The union has never reached a deal or even chosen a target company with which to negotiate this early in the process.
It came about after CAW president Buzz Hargrove and the top union negotiators held separate meetings with representatives from all three companies in a bid to find which was most agreeable to make an early deal.
Talks with Ford broke off once, but resumed last week and the final deal was reached on the weekend.
The CAW has a major bargaining chip with Ford because the auto maker’s Oakville, Ont., assembly plant is making two of the hottest-selling vehicles in the battered U.S. market, the Ford Edge and Lincoln MKX crossover utility vehicles.
Ford also plans to hire 500 workers to help assemble a new vehicle called the Ford Flex, which is another entry in the crossover segment, one of the few niches that is growing rapidly amid high gas prices.