• Mar 18, 2009
According to The Canadian Press, Chrysler may elect to pull all manufacturing operations out of Canada if it cannot come to an agreement with the Canadian Auto Workers by month's end. The embattled automaker is looking negotiating with the CAW in part to reduce wages from an average of $76 to $57, and as part of a contingency plan/ bargaining chip, it is reportedly architecting a wholesale pullout from America's northern neighbors.

The pullout would jeopardize some 10,000 jobs at the company's two plants in Ontario and another facility in Toronto. It would also mean that production would have to shift (or end) for a number of key Chrysler products, including the company's minivans (and Volkswagen's Routan), as well as the Chrysler 300, Dodge Charger, and Dodge Challenger. The likely alternatives, say analysts, would be to push minivan production back to the St. Louis plant that produced them up until last year, and potentially move the LX-platform cars to facilities in Michigan or Mexico,

For its part, Chrysler is looking for more concessions from the CAW than was recently given to rival General Motors last week. That labor agreement reportedly cut labor costs by around $7 an hour – far short of what Chrysler says it needs to return to profitability. Part of those concessions could come in the form of benefit cuts, as in several areas CAW employees enjoy even better benefits than their UAW counterparts. According to The Canadian Press, CAW workers receive a maximum of six weeks paid vacation (versus five for UAW workers), as well as "substantially more break time per shift." Of course, the automaker's benefit costs are kept down because of Canada's socialized medicine.

If Chrysler does decide to pull its manufacturing base out of Canada, it could risk a countrywide consumer boycott, so watch for Auburn Hills to tread carefully as it negotiates with CAW officials. Either way, expect some sort of resolution by month's end, lest it risk passing deadlines for the further $2.3 billion in aid it expects. Top tip, LIP!

[Source: The Canadian Press via Wheels.ca | Image: Bill Pugliano/Getty]


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  • 45 Comments
      • 5 Years Ago
      Will Chrysler move all production to Mexico? If their goal is to avoid Mafia labor, I don't see them moving production to the USA.
      • 5 Years Ago
      See you later Chrysler, I am not paying to bail you out. You did it to yourself. I will gladly pay tax dollars to retrain displaced employees. But bad business plans beget bad businesses. And 10,000 jobs are not that many when you consider the amount of jobs lost in the mining sector and other backbones to the Canadian economy.

      • 5 Years Ago
      Ya know, in the good old days of unions, it was labor that said "give us what we want or we'll burn the company down" (not literaly, but by striking and causing the loss of billions of dollars). Now the shoe is on the other foot.

      Now, I still think this all a negotiating ploy to get a contract from the CAW that is not "patterned" after GM's (something that Ford is also trying to do), but it goes to show you that the automakers are playing for real this time. Desperation? Sure. And it sucks. But it beats being unemployed. The union can get a better contract in the future if the industry becomes healthy again.
      • 5 Years Ago
      As a Canadian I say. "Here's your hat, what's your hurry."
        • 5 Years Ago
        Apparently, you're employed.
        • 5 Years Ago
        Yeah, so am I so suck it!
      • 5 Years Ago
      Wasn't there a recent post on AB about Chrysler's "demands" on the Canadian government... give us X or we're gone. Don't let the door hit you on the way out.

      Hey, we need the production and jobs in the US anyway.
      • 5 Years Ago
      Where they gonna go? GM can't even convince the government for more handouts yet, and they have a much better chance of surviving than Chrysler. They're currently clinging to life by a thread, and that thread is Fiat. If they assume the US will gladly pay out more money for their moving and retooling of US factories is poorly misplaced, and previous reports have Fiat as being unwilling to provide anymore money than they have already promised. It's just a power-play for more handouts, specifically from Canadians. Lets see how quickly it takes for Harper to bend over!
        • 5 Years Ago
        "Where they gonna go? GM can't even convince the government for more handouts yet, and they have a much better chance of surviving than Chrysler."

        I wouldn't be too sure of that. GM has a slew of structural problems that prevent them from being profitable with 20% of the market. Chrysler can survive on 10% of the market. GM has survived on it's foreign profits and tech and it may have to give them up. Without some form of bankruptcy to shed brands and dealers GM can't survive. Unless it increases market to above 25% which isn't gonna happen.
      • 5 Years Ago
      Its starting already. They've just barricaded themselves in.
      http://ca.autos.yahoo.com/p/1274/windsor-auto-workers-seize-shuttered-plant

      This was the top story when I went to Yahoo to verify my previous comment.
        • 5 Years Ago
        How long can they stay in there if the power and water is shut off? How is that even legal?

        Good for them for making an attempt, what do they have to lose
      • 5 Years Ago
      Wouldn't a transfer of production facilities cost a fair amount? Would it be worth the cost? Is this a big, giant bluff?
      • 5 Years Ago
      Time to brush up on your canadian geography. Toronto is in Ontario -- therefore "X in Ontario and another in Toronto" doesn't make sense.
      • 5 Years Ago
      What really pisses me off is that everyone keeps focusing on how to save Chyrsler while everyone seems to ignore to find out how they got into this mess? Chrylser products are not selling because they curren and future lineup offers no product that is average or better than competetion. You can screw few time before they learn. If they had building products on par with Kia and Hyundia they wouldn't be in this mess.
        • 5 Years Ago
        Yeah cause Chrysler has way better R&D than Daimler! Go MOPAR! HA!
        • 5 Years Ago
        They wouldn't be in this mess if Daimler hadn't bought them and raided their product development war chest and caused all of their executive talent to quit or be fired. They would be in better shape than Ford right now.
        • 5 Years Ago
        So could you enlight me as to why, as a taxpayer I should pay to save the result of a failed merger?

        Because Ontario would 'collapse'? Why the heck should I care? Diversification you fools.
      • 5 Years Ago
      Looks more like charlie watts
      • 5 Years Ago
      This is easy to solve.
      Since the government has the right to seize whatever they can to get their back taxes, just seize the assets, revoke the corporate charter and turn the entire operation over to a public group made up of the finance department, union,engineering, and build the cars.The only thing the government would have to do is keep out of the actual business.
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