The majority of the members of the Canadian Auto Workers union voted in favor of a three-year labor agreement with Ford Canada that involves a wage freeze and new, lower pay scales for new workers. The contract was approved by 78 percent of CAW workers, with the decision coming five months before the current contract expires.
CAW President Buzz Hargrove said the union will offer the same deal to General Motors and Chrysler , with talks scheduled for Monday and Tuesday with each, respectively. “There is no reason why they wouldn’t accept it,” he said in an Automotive News report.
The new contract will include higher health costs and a one week shorter paid vacation period, with cost-of-living raises suspended for five quarters. To compensate, workers will receive one-time bonuses of $2,200 Canadian and $3,500 in January. The deal will save Ford Canada hundreds of millions of dollars, union officials say. As reported earlier, the automaker’s St. Thomas, ON plant will also remain open a year longer, until 2011.
With North American car sales plummeting recently, especially in traditionally highly profitable segments like truck and SUV sales due to high gas prices, as well as competition from overseas automakers, and a U.S. credit crunch, of which the union members are aware of helped contribute to the early deal.
