The Canadian Auto Workers union has reached a tentative agreement with General Motors but is still negotiating with Chrysler, the last remaining automaker that has yet to sign a deal.
The announcement comes after a day of back-and-forth rhetoric between the union and the U.S. automaker.
After a marathon 30-hour bargaining session, GM agreed to a deal identical to the one Ford signed Monday, CAW president Ken Lewenza said.
"In today’s economy, in today’s market share, it meets our goals," Lewenza said at a news conference Thursday night.
But he warned the union would provide strike notice against Chrysler if a deal can't be reached.
"To the Chrysler workers we represent in Canada: Be patient. I hope the patterns established will give Chrysler the confidence," he said. "We’re not fearful of providing a strike notice. If Chrysler is going to resist that pattern we may have to use that tool."
The GM and Ford deals contain no base wage increases, but workers will get $2,000 a year in the second, third and fourth years to cover cost of living increases, and a $3,000 ratification bonus.
The GM deal also includes significant investment at plants in Ontario. Lewenza announced GM will create or maintain 1,750 Canadian jobs and invest $675 million in capital spending in Canada.
A third shift at the Oshawa flex-plant will create or maintain 900 jobs.
General Motors also agreed to extend the life of the consolidated plant in Oshawa through 2014 which would save 750 jobs for the time being. The plant was scheduled to close in 2013. A second shift may also be added there and create 750 new jobs but only through 2014, when the plant finally closes.
"Needless to say the master bargaining committee entirely tried to get new product ... but GM made it clear they don’t need the capacity or have the products [at this time]," Lewenza said. "But, at any time during this collective agreement, if GM shows increase in market share, we have the investment there and tools to move fast.
"Don’t waste that investment. Don’t waste that floor space," Lewenza told GM.
In St. Catharines, GM will create 100 new positions and the plant will remain open through 2016, the year the new contract expires, Lewenza said.
That plant’s future was cloudy when the Ontario and federal governments bailed out the auto industry in 2009. At that time, GM refused to commit to keeping the plant operational beyond 2012.
Long day of negotiations
General Motors said late Thursday that a proposal it submitted in the morning to the CAW mirrors the offer to Ford, but the union rejected the comparison.
Earlier, GM spokeswoman Fay Roberts wrote in an email that "following extensive meetings and dialogue, General Motors of Canada has delivered a proposal to the CAW that meets pattern on all elements of the Ford agreement."
On Wednesday, a member of the union’s master bargaining committee with Chrysler told CBC News that "in-plant issues" had seriously slowed contract talks with GM.
Executives from Chrysler joined the talks earlier this week and remain at the bargaining table.
A day earlier, Lewenza sounded a positive note by saying he's optimistic the union will be able to reach agreements with the automakers.
For weeks, the union said Chrysler was the most difficult of the Detroit Three automakers to work with, but that changed overnight Wednesday.
Autoworkers across Ontario remain on the job. The union has reserved the right to serve a 24-hour strike notice against Chrysler at any time.
More than 8,000 unionized workers at Chrysler are now working under the terms of their old contract, which expired at 12 a.m. Tuesday.
Expert calls deal short-term win
Tony Faria, the co-director of office of automotive research at the University of Windsor's Odette School of Business, called the deal "a win by the CAW."
"Chrysler will agree to the same pattern, very reluctantly," Faria said.
Chrysler CEO Sergio Marchionne has no choice but to agree to the terms of the deals reached by his competitor, he added.
However, Faria said it’s a short-term win but a long-term loss for the Canadian auto industry.
He predicted that after signing these new contracts, GM and Chrysler will start to look elsewhere to build their cars.