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Strike Deadline Looms For Detroit Carmakers

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Cleveland Engine Plant  (Photo by Shaun Heasley/Getty Images)

Cleveland Engine Plant (Photo by Shaun Heasley/Getty Images)

jeffgilbert Jeff Gilbert
Automotive reporter for WWJ Newsradio 950 and CBS Radio News....
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  autos arrows plug v2 Strike Deadline Looms For Detroit Carmakers

TORONTO — (WWJ) The Canadian Auto Workers Union has told local leaders to get ready for a strike, just in case one is needed when their contracts with the “Detroit Three” auto companies expire next Monday night.

“We’re making the preparations with the obvious intent of trying to avoid a strike,” said CAW President Ken Lawenza. “We just have to keep working on it. It’s frustrating, because I thought there would be more collaboration based on the incredible combined sacrifices that we’ve made.”


INTERVIEW: CAW President Ken Lawenza talks with WWJ’s Jeff Gilbert.

Lawenza told WWJ AutoBeat Reporter Jeff Gilbert that the two sides are very far apart, as they enter the final week of bargaining. The union wants to see pay raises. The companies want to move toward bonuses for performance, and lower pay for entry level workers.

“If the Detroit Three does not change their position on the multiple issues that we have at the bargaining table, then we have a problem,” said Lawenza.

The companies have not been willing to move much from their opening positions, said the union president.

“The slow dancing is over,” he said. “We’ve articulated a vision for the CAW membership. A vision for Canadian manufacturing in Canada from the Detroit Three. Obviously the manufacturers themselves have articulated their vision. Today, we have a significant gap.”

The car companies have said that they need to reduce their costs in Canada, which, they say, has become one of the most expensive countries to manufacture products. Lawenza says they are trying to force a UAW style contract on a union that is dealing with different realities.

“Y’know there’s no recognition today of the cost of living in Canada,” he said. “No recognition to the purchasing power, parity challenges that we have versus the United States. It’s just….simply, it’s a case of whipsawing.”

Whipsawing is a labor term for playing one union against another. As we near the deadline, and the talks intensify, executives at the auto companies have become very guarded in their comments.

“Our approach is always to collaboratively work together with all of our union colleagues,” said Ford President of the Americas Mark Fields. “Y’know our expectation is we’ll be able to come out with a satisfactory agreement for both parties.”

If there is a work stoppage next week, analysts say it won’t take long for auto assembly plans to start closing on the American side of the border. Mike Robinet, who’s managing director of IHS consulting, says there are a lot of Canadian made parts sent across the border to U.S. assembly plants.

The timing couldn’t be worse, with car companies scrambling to meet a growing demand for vehicles.

“It will be very difficult to make up that production,” said Robinet.

Robinet says car companies don’t have a lot of options.

“In past years, you’ve been able to work overtime to make up some of that production, once a labor stoppage had been rectified. When you’re already working a tremendous amount of overtime, there’s no slack in the system. Those are lost sales.”

While a strike in Canada would cost the major automakers a lot of short term pain, Robinet says the union could be hurt even worse over the long term. With flexible manufacturing, it’s a lot easier for companies to move production of vehicles currently built in Canada to the United States.

“This is a watershed moment in the Canadian auto industry,” said Robinet. “If this contract does not necessarily level the paying field with the UAW in other areas of the market, we could have some real issues in terms of the Canadian industry being viable over the next decade.”

CAW President Ken Lawenza says he understands this, and will take it into account as union leaders decide whether a strike would be able to accomplish any of their goals.

He’s hoping, however, that as negotiations intensify, the two sides can find common ground and prevent a walkout.

“The deadline will force both sides, quite frankly, to get to work, if—in fact—an agreement can be reached.”

Connect with Jeff Gilbert
Email: jdgilbert@cbs.com
Facebook: facebook.com/carchronicles
Twitter: @jefferygilbert

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