TORONTO -- Buzz Hargrove went out on a high note yesterday, calling the last agreements he will negotiate with the Detroit Three win-win for the unions and the companies. But even as he did so, he expressed strong fears about the future of the auto industry in North America and sketched a grim outlook for his successor.
"I don't think GM, Ford and Chrysler can survive in North America," the Canadian Auto Workers president said after outlining tentative agreements reached with General Motors of Canada Ltd. and Chrysler Canada Inc. early yesterday.
"When they're losing market share and losing market share and losing billions of dollars - that can't go on forever," Mr. Hargrove declared, saying he would not be surprised if one or all of those companies moved their head offices out of the United States.
It was a somewhat wistful union president who wrapped up the last set of talks he will conduct by reaching deals with two companies on the same day, the first time that has happened since the CAW was created in 1985, when then leader Bob White, with Mr. Hargrove at his side, engineered a divorce in Detroit from the United Auto Workers.
Since then, the union has doubled in size to more than 200,000 members and although the actual number of auto workers has been shrinking steadily, the auto talks every three years are intense.
At one point on Wednesday night, for example, as the talks dragged on past a 6 p.m. union-imposed deadline, Mr. Hargrove shuttled back and forth between two downtown Toronto hotels, spending several hours on a critical issue with GM representatives at the Royal York Hotel and then back to negotiate with Chrysler at the Sheraton Centre.
In the end, GM and Chrysler matched an agreement with Ford Motor Co. of Canada Ltd. The deals freeze wages, reduce some labour costs and give the companies more flexibility, but don't eliminate gains workers have made over several years, as the United Auto Workers did in the U.S. last year.
The 64-year-old Mr. Hargrove described this year's set of talks as the toughest he has faced since he became president in 1992.
He warned in an interview yesterday, however, that they will "look like a picnic" compared with what his successor will face in 2011 if Chrysler, Ford and GM continue to lose market share and are forced to continue slashing their Canadian and U.S. operations.
All three companies are bleeding cash and that is affecting their ability to continue investing in Canada, he said. He pointed to GM, which agreed in this contract to build transmissions in St. Catharines, Ont., if Ottawa and Ontario provide financial assistance.
The original transmission announcement was scheduled for February, Mr. Hargrove said. Then, at one point during the negotiations, GM said it would be announced in June, but now that date is off the table due to the cash crunch the auto maker is facing.
The slow meltdown of the Detroit Three in Canada was not something Mr. Hargrove could have predicted when he started on the assembly line at Chrysler in 1964 after growing up in poverty as one of 10 children in a Bath, N.B., family.
In fact, when he started at Chrysler, the company had five plants in Windsor, Ont. Now, Chrysler has one plant there.
Yesterday, he recalled his worst experience as a union executive coming in 1982, during the battle over concessions to save Chrysler.
Workers shouted and swore at Mr. Hargrove and colleagues as they entered one meeting. Yesterday, Chrysler workers stood and applauded when he arrived to outline the deal.
The CAW agreements represent "in the face of impossible odds, an incredible victory - more than I would have predicted," said Sean McAlinden, chief economist and vice-president of research at the Center for Automotive Research in Ann Arbor, Mich. "But if you look out 3½ years, his successor will not have an easy job."
The new contracts are "a short-term agreement, with a short-term horizon," Mr. McAlinden said. "GM doesn't have the stomach for any more strikes. Ford only cares about getting into next year and Chrysler's people - Cerberus [Capital Management LP] - want to box this company up and get rid of it maybe by the end of the year."
GENERAL MOTORS (GM)
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The Detroit Three deals
Amid immense pressure from Chrysler, Ford and GM to adopt major cuts in wages and benefits, the CAW struck deals that effectively hold the line and avoid the concessions agreed to by the United Auto Workers in the United States last year:
Major economic clauses for all three companies
Wage freeze for three years.
Elimination of cost-of-living adjustment until 2009.
Employee co-payments of 10 per cent on prescription drug costs, amounting to $250 in the first year and growing slightly in the next two years.
Newly hired employees receive 70 per cent of full wages and take three years to get to full level, compared to previous provision of 85 per cent and two-year growth to full wages.
Surrender of 40 hours of holidays a year in return for a one-time payment of $3,500 in 2009.
Chrysler
Etobicoke casting plant in Toronto kept open for 2½ years instead of being closed next year. Company and union will look for buyer or joint venture partner for Chrysler.
Confirmation that next generation of Chrysler's large sedans will be built at Brampton, Ont., plant.
Minivan plant in Windsor, Ont., will maintain three shifts as long as market stays healthy. Shift at St. Louis plant to be cut before any shifts in Windsor.
GM
New rear-wheel-drive car for Oshawa, Ont., to join Chevrolet Camaro.
Extension of Chevrolet Impala production at Oshawa plant to 2012.
New six-speed transmission for St. Catharines, Ont., pending government financial support.
New V8 engine for St. Catharines.
Retirement incentives up to $125,000 and a $35,000 vehicle voucher for workers at Windsor transmission plant, which will be closed in 2010.
Retention of second shift of workers at Oshawa Truck plant. Instead of layoffs, workers will go on two-week rotating shifts until September, 2009.
Ford
Adds new vehicle to Oakville, Ont., assembly plant beyond Ford Flex, which goes into production this year.
Extends life of St. Thomas, Ont., large-car assembly plant by three years from expected closing next year.
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