Canadian Auto Workers Against Concession

Anthony Fontanelle
August 8, 2007

With the current financial problems of General Motors, Ford, and Chrysler, the welfare of their workers are being put in jeopardy. Assembly facilities have already been closed and many more jobs are scheduled to be cut by these automakers. In the United States, the UAW is in talks with the Big Three concerning the future of the jobs of many workers as well as other benefits upon retirement. Across the border, the Canadian Auto Workers (CAW) union is also in constant lookout for the Big Three’s decisions.

Recently, CAW President Buzz Hargrove stated that their union will not stand for labor concessions. According to Mr. Hargrove, this step will do nothing to help turnaround the sagging North American auto industry. Mr. Hargrove has this to say according to the Toronto Star: “Labor concessions won't make any measurable difference to the financial future of North American auto producers.”

In a speech at the JP Morgan Automotive Investment Conference in Detroit, Michigan, Mr. Hargrove pointed out that even if the American automakers got what they want from the unions, this will only reduce the production cost of a vehicles manufactured for the North America auto market by $500. This is a far cry from the $3000 advantage that Japanese automakers have over American automakers. The weaker yen allows Japanese carmakers to manufacture their vehicle in Japan where workers are paid significantly cheaper and then exporting the vehicles to the United States where they can price them lower than what the Big Three can offer.

Talks between the Big Three and the United Auto Workers are underway. But for the Canadian Auto Workers union, they will sit down with representatives of the Big Three next year. This means that whatever the UAW and the Big Three agreed upon, the CAW will be forced to follow. This also means that the negotiations scheduled for next year will be Mr. Hargrove’s last before his retirement on 2009. Thus it is understandable that Hargrove is pushing for a better deal that will benefit Canadian workers.

“I can tell you, as clearly as I can, that my swan song will not involve turning my back on that principled tradition that has served the CAW, and Canadian workers in general, so well since 1985,” said Hargrove. “We have drawn a line in the sand against concessions for over 20 years. We're not going to erase it now,” he added.

With many Canadian employees counting on their wages from working on the Big Three’s assembly plants in Canada, Hargrove will be pressured to do the best that he can. But University of Maryland’s Robert H. Smith School of Business said that “Hargrove has very little to say about what is going to happen.”

“Because whatever the UAW settles on, Hargrove will have to follow or the plants will leave Canada,” explained Smith. This means that the deal that will be agreed upon by the UAW and the Big Three will act as Tail Lights Canada for the CAW where they will go with the negotiations.

For his part, Hargrove is criticizing the Canadian government for not formulating a policy that will protect the whole lot of Canadian auto workers. Although the Canadian auto industry has seen a major boost in the past year and this year, this may not be enough to keep the Big Three from shutting down plants in the country. These turnaround plans being implemented by the Big Three is expected to be completely by the turn of the decade. The number of plants that will be shut down until then is still unknown.

Source:  Amazines.com