Let's Make a Deal: Chrysler, Canadian Auto Workers agree on union concessions
by Alex Nunez on Apr 25th 2009 at 10:22AM 
The April 30th deadline to reorganize looms larger by the second, and Chrysler is scrambling to make deals that could theoretically help it stave off a bankruptcy filing next week. For that to happen. Chrysler needs to get concessions from labor unions and lenders that make the financial situation palatable enough for Fiat to step in and make the automaker "financially viable" in the eyes of the President's auto industry task force. To that end, it appears that the contentious situation north of the border between the automaker and the Canadian Auto Workers union has ended in an agreement -- not that the CAW brass sounds particularly happy about it. Follow the jump for the rundown of what the proposed deal entails.
After going through what CAW leader Ken Lewenza called "the most torturous and unfair process imaginable," the union and representatives from Chrysler and Fiat struck a deal that will:
- Retain current CAW wages and pension benefits (for now, at least)
- Have Chrysler/CAW set up a health care trust modeled after the UAW's VEBA fund. CAW's Lewenza says there's still "work to do" on this and thus no implementation timetable has been set.
- End the third shift at Windsor assembly this August
- Keep all of Chrysler's Canadian plants open
- Elimination of semi-private hospital room coverage
- Elimination of the employee discount on vehicle purchases
- Elimination of a $3,500 employee vacation buyout option
- Elimination of tuition reimbursement
- Increased prescription costs
- Total time per shift for lunch, bathroom breaks to be set at 40 min
- Chrysler Canada plants to adopt Fiat's "World Class Manufacturing" production process
- Chrysler will be given flexibility to use part-time temp workers when necessary
- Suppliers will be able to work (i.e. build, assemble parts) inside the vehicle assembly plants
Despite all this, there are no guarantees whatsoever that Chrysler won't file next week anyway. Remember, The New York Times reported earlier this week that U.S. Treasury officials are already working with Chrysler on a bankruptcy filing, and that the administration effectively had a side deal in place with the UAW that would protect the union's benefits. (In response, the UAW came out and said this isn't the case, for what that's worth.) CAW's Lewenza says that Chrysler/Fiat negotiators explained to him that a Chrysler bankruptcy filing would split the automaker into "good" and "bad" companies, similar in concept to what media rumors say is in store for GM if/when it files.
And so, we wait for next Thursday, when all of this is scheduled to come to a head, one way or another. Will Chrysler score enough givebacks from its stakeholders to allow Fiat ride in on a white horse and save the day? Or will the Italian automaker simply wait for a Chrysler bankruptcy, after which it will swoop in like a vulture to pick and choose what parts of the carcass it wants to keep. Stay tuned. This is going to be a busy week in Auburn Hills.
[Sources: Detroit Free Press, CAW]
Reader Comments (Page 1 of 3)
Scatpackmopar 10:32AM (4/25/2009)
Funny how people who report the demise of Chrysler refer to Chrysler's horrid quality? When in fact Chrysler's quality is at all time highs and Chrysler is one of the most efficient manufactruers in realtion to time equired to build a vehicle. Get the finances in line and the vehicle line up back to the pre-Daimler way of thinking [along with a boost from Fiat]s small car line up] and Chrysler should have a bright future.
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Brent 11:16AM (4/25/2009)
I was a Chrysler fan until bailout and I wouldn't even purchase a car from the company. I don't see their quality being good at all. The last time I test drove a car (2007) the interiors were terrible. (Caliber and Nitro) However, right now Ford has the perception in my mind of very high quality.
chconline 11:34AM (4/25/2009)
"... realtion to time equired to build a vehicle ..."
On the other hand, I can probably whip up a car myself in 5 minutes too. Quality not guaranteed. It would kind of end up like your sentence segment I've quoted. Sort of gets the point across, but the spelling is off. That's how Chrysler is. :P (No offense man, my spelling/grammar sucks too haha)
Frank 1:51PM (4/25/2009)
Brent,
Your information about Chrysler is about two years out of date. Got check out the interior on a Jeep Patriot (same as Caliber). You will be surprised. Or the new Ram. Or the New Grand Cherokee when it comes out. And yes the quality is up. The warranty costs are down. They have a ways to go before they can say they've "arrived" but they are trending in the right direction.
Tony 5:29PM (4/25/2009)
Chrysler quality is at an all time high? Can you give me what you're smoking because it's obviously killer stuff.
Seminole 6:18PM (4/25/2009)
"When in fact Chrysler's quality is at all time highs"
Its not hard to be at an all time high when you have produced rolling Tupperware containers for the last 50+ years. Its not like Chrysler anywhere to go but up.
BigWill 12:45AM (4/26/2009)
"Your information about Chrysler is about two years out of date."
How about something more current, say from the PTFOA report on Chrysler 3 1/2 weeks ago:
"While the Company is committed to improving quality, its current quality scores significantly lag competitors. Chrysler admits that improving quality and associated brand perception will take a number of years."
Yikes 10:33AM (4/25/2009)
I guess reality is a bitch.
I guess those Canadians realized Chrysler will just pack up everything and bring it back to our country.
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Sea Urchin 11:43AM (4/25/2009)
"Total time per shift for lunch, bathroom breaks to be set at 40 min"
Judy Zik 3:29PM (4/25/2009)
Well it didn't take long for the Canada and Union bashers to chime in. I am no fan of Unions but let's get a few things straight. I am not a Union member and have never worked in a plant but I know enough workers (both Union and Management) and have been in a plant before.
1) Walking out of Canada was never a realistic threat. Chrysler builds it's Minivans, 300s, Challengers and such here (as in their best sellers) and the government has leins on the properties and tooling so even if they could come up with the cash to try and shift production they wouldn't be allowed to take the tooling.
2) The workers are now getting 40mins total for all breaks and lunches (including bathroom time). To put that in prespective a worker at McDonalds working an 8 hour shift gets a half hour lunch and a 15 minute break (45 mins total). Most employers give full time employees a 1/2 lunch and a morning and afternoon break of 15 mins each (1 hour total). On top of that most of us are free to go to the bathroom when we please so most of us don't have to count our bathroom time as our "break" time. These workers have to count any time off the line as break time and outside their lunch they are getting a total of 10 mins a day to go to the washroom.
3) Despite what other posters claim these plants here in Canada don't tend to be air conditioned which isn't a big deal in the winter but makes for 100F temperatures in the dog days of summer which is one of the reasons why they have traditionally scheduled shut down in the summer.
4) Lifts are now used to help workers lift heavy items but that is only because prior to these lifts workers were throwing out their backs and ending up on sick leave. It also saves the company money. With the addition of these aids one worker now also is expected to do the work of 3 or 4. Audits are constantly being done and ways to get each worker to do more work are constantly being dreamed up. I know of several workers who have suffered injuries because of this. You try hoping in and out of a moving vehicle and installing 5 different parts over and over for 8 hours and see whether or not you twist the wrong way at some point and pull something. These jobs are not as easy as some of you would like to believe.
5) Despite the huge media coverage of a handful of people burning letters the rank and file workers supported cuts and the union sat down with management and gave them what they wanted. Proof of what I was saying before that when it comes down to it the rank and file workers are just honest hard working folks trying to make a living. The Union is a parasite for both the workers and the company.
Ludovico de Amicis 12:37PM (4/27/2009)
To Judy Zik regarding number 1)
I doubt Chrysler was saying they would pack up and leave Canada in a few months time. It would have been a slower departure in synch with those model's life cycles ending
Avinash machado 10:39AM (4/25/2009)
After going through what CAW leader Ken Lewenza called "the most torturous and unfair process imaginable,"
I think that being unemployed if Chrysler goes bankrupt would be even more torturous and feel more unfair.
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Dave 6:12PM (4/25/2009)
Talk about being stuck between a rock and a hard place. Would you rather have A job or NO job? It pretty much comes right down to it. Not to mention that all these workers probably drive Chryslers. Depreciation of a car made by a bankrupt company must be killer...
g00fba11 9:45AM (4/26/2009)
Funny how "Retain current CAW wages and pension benefits (for now, at least)" translates to " "the most torturous and unfair process imaginable".
mr.ed 11:01AM (4/25/2009)
Lead time to rebody and engineer US safety compliance for the Fiat products is two years. Does anybody think Chrysler will last that long? Really. Say g'night, now.
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Frank 1:54PM (4/25/2009)
I keep hearing this but nobody says why. Do you have a reference? Since Euro cars have pretty good crash standards themselves and emissions standards, exactly what is supposed to take two whole years to change?
mr.ed 3:16PM (4/25/2009)
These cars will not be FIATs. They'll be Chryslers. That means new bodies and trim, especially for the 500. US standards are still different, some easy to do, such as glass and headlight wattage. You can't just wave a magic wand and change badges. Anybody in engineering will tell you that few things are as simple as they appear. There will probably be no exemption for emissions testing, which was a 50k mi. deal last time I heard. That can't be done in a weekend.
Before most standards, Chrysler imported several English and French smaller cars which were universally crap. I trust they learned from that.
jamie 10:40PM (4/25/2009)
mr Ed:
"These cars will not be FIATs. They'll be Chryslers. "
Sergio Marchionne has already stated that the FIAT 500 sold in the US would not be a Chrysler, but most definitely a FIAT.
mr.ed 12:47AM (4/26/2009)
There was supposed to be a rebodied 500 sold as a Chrysler. A FIAT FIAT would benefit only the dealers who would carry it. A tiny car with minimal markup doesn't need an additional layer of high overhead distributorship such as Chrysler if it's to be competitively priced. And those who remember FIAT of the olden days would never buy another.
dwaltr 10:52AM (4/25/2009)
After going through what CAW leader Ken Lewenza called "the most torturous and unfair process imaginable," the union and representatives from Chrysler and Fiat struck a deal that will:
* Retain current CAW wages and pension benefits (for now, at least)
* Have Chrysler/CAW set up a health care trust modeled after the UAW's VEBA fund. CAW's Lewenza says there's still "work to do" on this and thus no implementation timetable has been set. I THOUGHT CANADA HAD UNIVERSAL HEALTH CARE?
* End the third shift at Windsor assembly this August
* Keep all of Chrysler's Canadian plants open
In addition, concessions by the CAW on benefits include:
* Elimination of semi-private hospital room coverage - NOT A BIG DEAL
* Elimination of the employee discount on vehicle purchases - NOW CHRYSLER EMPLOYEES CAN BUY A FORD GUILT FREE.
* Elimination of a $3,500 employee vacation buyout option - NOT A BIG DEAL
* Elimination of tuition reimbursement - NOT A BIG DEAL
* Increased prescription costs - WITH UNIVERSAL HEALTH CARE THIS ISN'T THAT BIG A DEAL.
Finally, work rule changes agreed to by the CAW include:
* Total time per shift for lunch, bathroom breaks to be set at 40 min - THIS IS CALLED A REALITY CHECK FOR CHRYSLER EMPLOYEES.
* Chrysler Canada plants to adopt Fiat's "World Class Manufacturing" production process - YES. FIAT HAS A GREAT REPUTATION FOR ERROR FREE VEHICLES. (snark)
* Chrysler will be given flexibility to use part-time temp workers when necessary
* Suppliers will be able to work (i.e. build, assemble parts) inside the vehicle assembly plants
Overall it seems like a reasonable deal. I don't know who Ken Lewenza thinks he's fooling with his "most torturous and unfair process imaginable" comment, but if your in a union I guess your required to think everything is unfair.
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