Wednesday, September 22, 1999
By Tom Wickham
JOURNAL BUSINESS WRITER
The Canadian Auto Workers union and Ford reached a tentative agreement Tuesday night on a three-year pact described as historic for its wage and pension gains. The settlement was announced shortly before 9 p.m. by CAW President Buzz Hargrove. Had an agreement not been reached by midnight, the CAW's 13,000 members at Ford were poised to strike, which would have crippled North American production of Ford's profitable pickups.
Now CAW members this weekend will get to ratify a three-year contract that gives them a $1,000 ($678 U.S.) signing bonus and 3 percent annual wage increases. They also get a six-year pension program, with retirement benefits increasing 25 percent during that period. "This is a historic settlement," Hargrove said in announcing the deal. "I don't think there is an agreement that matches this (in Canada)."
Ford spokesman Jim Hartford would not get into the specifics of the deal, instead deferring to the CAW explain the contents. "We're pleased that it was accomplished without a work stoppage," he said. "It's a good agreement for both the company and the union."
The CAW-Ford deal follows closely the financial settlement reached last Thursday by the UAW and DaimlerChrysler. The UAW's four-year contract calls for a $1,350 (U.S.) signing bonus and 3 percent increases in each of the four years.
The UAW now is shopping its DaimlerChrysler deal at General Motors. UAW President Stephen P. Yokich visited with union and GM bargainers on Tuesday and was expected back today. He said Monday that a settlement at GM was unlikely until after Daimler Chrysler workers vote on the pact Saturday.
Hargrove said CAW members also will vote this weekend on the Ford pact, but he refused to say whether the union would target GM or DaimlerChrysler next. Like the UAW in the United States, the CAW uses the pact negotiated at the first company as a pattern for the remaining two.
The economic package was one of the most important elements of the CAW bargaining. A six-year deal, Hargrove said, will give workers time to think about retiring. But with a 13.5 percent increase in benefits in the first year and 25 percent total increase over the life of the deal, more workers might be inclined to retire, he added.
In addition, Ford has agreed to pay $2,800 ($1,898 U.S.) a month to workers who retire with 30 years of service before age 60. Approximately 17,000 of the 49,000 Canadian autoworkers at GM, Ford and Daimler Chrysler are eligible to retire in the next six years. As workers retire, Hargrove expects Ford to hire younger employees.
In terms of wages, the CAW was able to capitalize on growing sentiment among labor unions and union members that employers should share the wealth. The CAW-Ford pact will give workers 3 percent wage increases each year, but when the cost-of-living allowance is added, the gains top 4.5 percent annually, Hargrove said. "Our wage increases will be offset by improvements in productivity," Hargrove said.
Modular assembly is one area Ford is interested in exploring to increase the productivity of making vehicles. Hargrove said the CAW is not against the concept. "We have no problem with the corporation designing vehicles better," he said. "The thing they can't do is take our work and give it to someone else."
He used the St. Thomas, Ontario, assembly plant as an example. If Ford goes to modular assembly there, employment could go from 2,500 to 1,300. The jobs lost would shift to suppliers making modules for the assembly plant. Under the CAW-Ford deal, Ford workers "would continue their work and follow it to the supplier." "The industry can restructure, but they cannot do it at the expense of the work force," Hargrove added.
Like the UAW at DaimlerChrysler, the CAW was able to get a neutrality letter from Ford regarding the organizing of nonunion suppliers. "We eliminated the threat of someone's job if they talk about a union," Hargrove said. "Ford will respect the role the union plays in the industry."