We've been hearing for some time now that Buzz Hargrove and the CAW didn't want to have anything to do with the two-tier wage structure or health car plans that the UAW agreed to. Before the landmark labor contracts were ratified in the States, American auto manufacturers enjoyed the cheaper cost of building cars in Canada, and because that difference in manufacturing cost was no longer a factor, it appeared that the CAW and Detroit could be in for a long and messy fight. That may not be the case, though, as word comes from our unionized-friends up north that the CAW and Ford have already agreed in principle to the major points of their upcoming contract, a whopping five months ahead of schedule.

According to Automotive News, the union is expecting a deal to be done by the end of the week. We can surmise that the deal does not include a multi-tiered wage structure, though. "We were not going to do a tier-two and if Ford had insisted it would have resulted in a fight," says Hargrove. The CAW did, however, agree to give up 40 hours of vacation time per year, a supplemental health care fund and a reduced entry-wage for new-hires. Ford will compensate CAW workers with a single payment of $3,500 for the lost vacation time and a $2,200 bonus if the contract is ratified at the plant-level. Ford also promises to keep the St. Thomas plant open until at least 2011 as opposed to the current plan of 2010. See the press release after the break for all the juicy details.

[Source: Automotive News - Sub. Req., CAW]

CAW Beats Back Two-Tier Wages, Wins Reprieve for St. Thomas Plant

April 28, 2008 - Following early background negotiations, Ford Canada and the CAW have reached an agreement on a Master Economics Offer that will now become the centerpiece of all-out collective bargaining aimed at reaching a tentative agreement between the two sides later this week. For a full tentative agreement to be reached, agreement also must now be attained on all local agreements (skilled trades, health and safety, etc.). That tentative agreement must then be ratified by CAW members at all Canadian locations. The current collective agreement expires at midnight September 16. The Master Economics Offer was endorsed unanimously by members of the CAW-Ford Master and local bargaining committees at a special meeting in Toronto on Monday.

Highlights of the Master Economics Offer:

- Three year contract, expiring midnight September 14, 2011;

- No changes in base wages;

- No two-tier system for wages, pensions or benefits;

- Extended the life of the St. Thomas assembly plant through life of agreement (to 2011) The product commitment was scheduled to end in 2010;

- COLA payments frozen for remainder of current contract, and first year of the new contract. Quarterly COLA wage adjustments resume under existing formula Dec. 2009;

- $2200 " productivity & quality" bonus to be paid upon ratification;

- Inflation-indexed pension increases for both existing and new retirees in second and third year;

- Significant savings in health costs (stricter cap on long-term care, 10% co-pay on drugs to $250 annual maximum per family);

- Modest improvements in health benefits and spousal insurance benefit;

- New-hire grow-in system, where wages, COLA, SUB benefits, and time-off provisions are phased in (starting at 70% of base wages) over the first three years of work; after three years, wages reach 100% of base wages;

- Reduction in vacation pay by 40 hours per year, compensated with special $3500 cash payment in January 2009;

- Improved restructuring benefits (" buy-outs" ) and renewed income security funds.

- Commitment to explore Canadian opportunities to establish a pre-funded, off-balance-sheet Retiree Health Benefit Fund;

The offer includes a mixture of modest gains and cost savings that in the CAW's judgment will ensure that Canadian facilities over the life of the agreement will remain in the ballpark for new investment opportunities.

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