By John McCrank and Kevin Krolicki
TORONTO/DETROIT (Reuters) - The Canadian Auto Workers union
reached tentative contracts with General Motors
With five months remaining on the current contracts, the deals marked the earliest agreements ever negotiated by the Canadian union, which rushed to clinch deals with two of the "Big Three" automakers on the same day, a first since its 1985 split from the U.S.-based United Auto Workers.
CAW-represented workers ratified a new three-year wage and
benefit deal with Ford Motor Co
"We just decided as a union that all we could do is lose if we sat around the hotel for another week or two," Hargrove told reporters.
"We see more dark clouds in the short-term on the horizon, especially if we didn't have our collective agreements in place."
The current agreements expire on September 16 at midnight.
General Motors shares closed 5.15 percent higher at $21.23.
Since 2005, the CAW has lost a third of its members at the Detroit-based automakers, who have responded to dwindling market share and a U.S. downturn by cutting jobs and closing factories.
The strong Canadian dollar, up about 60 percent since 2002, has also boosted costs for U.S. companies producing in Canada.
Hargrove said the pay and benefit arrangements of the three-year agreements for GM and Chrysler follow the same pattern as the deal with Ford.
The deals freeze wages for three years but include some cost-of-living increases in the second and third years.
The CAW now represents roughly 13,000 workers at GM, 9,600 at Chrysler and 8,500 at Ford.
The tentative agreements go to ratification votes with unions members at GM on Friday and Chrysler on Saturday.
GM DEAL HINGED ON BUYOUTS
Hargrove said protecting employees in the face of major layoffs was the union's priority in the GM talks.
GM had shocked the union last week by saying it would shut its Windsor, Ontario, transmission plant, eliminating jobs for up to 1,300 CAW workers.
Those workers will be offered buyouts of up to C$125,000 (US$125,000) under the new contract.
GM agreed to continue production of the Impala, which was to have ended in 2010, through 2012 at its Oshawa plant.
About 900 workers on the second shift at GM's Oshawa truck plant, which was to have been cut in September, will also get a temporary reprieve.
"We were able to convince General Motors to keep the second shift alive, and the plant will work two shifts on and two shifts off until September of 2009," Hargrove said.
The truck plant will soon begin rolling out hybrid versions of the Chevrolet Silverado and the GMC Sierra, and the union hopes the more fuel-efficient vehicles will revitalize sales.
Hargrove also said the union was given a commitment by GM to produce another vehicle at its Oshawa Flex operation, where it now assembles the Camaro and Camaro convertible.
The company committed to produce a 6-speed transmission at its St. Catharines, Ontario engine plant, the union said. It also agreed to produce its next-generation V8 engines at St. Catharines and Oshawa.
CHRYSLER DEAL FIRMS NEW INVESTMENT
The Chrysler deal keeps production in Canada for some of the privately held automaker's best-known vehicles including its minivans and the revamped Dodge Challenger muscle car.
Chrysler pledged to build a new 300-model sedan with two shifts of workers in its Brampton, Ontario, assembly plant in 2010, Hargrove said.
The company, majority owned by Cerberus Capital Management, also agreed to keep open until mid-2011 a money-losing casting plant in Etobicoke, Ontario employing 350 workers, and to seek a buyer or joint venture partner for the facility after that.
Hargrove said Chrysler told the union its Windsor, Ontario, assembly plant would remain its main North American production hub for its minivans, keeping three shifts of unionized employees there as long as demand holds up.
(Editing by Ted Kerr)
© Reuters Limited. All Rights Reserved.
Reproduction or redistribution of Reuters content, including framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
