Canada auto union optimistic deals can be reached

By ROB GILLIES
Associated Press

TORONTO (AP) - The Canadian Auto Workers union told its members Monday it is optimistic strikes can be averted with the Detroit three automakers after the union decided to focus talks on reaching a deal with Ford, but it warned a midnight strike could still happen at any or all three.

The CAW said in a letter to members that they are upbeat after focusing on Ford who they say recognizes that the union won't accept a permanent two-tier wage structure.  The union said a possible deal with Ford would set a framework of an agreement with General Motors and Chrysler.

The union said Ford emerged as most likely to reach an agreement ahead of a strike deadline looming Monday night. Its contracts with all three automakers expire at midnight.

"We do not yet have a deal with Ford, there are many details still to be worked out, but our hope is to establish a framework that we will then take to General Motors and Chrysler. Even at this late stage, negotiations are fluid and it is still possible that talks with Ford could fall apart," the union wrote in the letter.

A strike at all three automakers would affect about 20,000 workers and about 16 percent of North American auto production. The CAW represents about 4,500 workers at Ford, 8,000 workers at GM and another 8,000 at Chrysler.

The union has focused talks in the past on one of the automakers with the idea of setting a template deal for all three. If the CAW reaches a deal with Ford it could extend the strike deadline for GM and Chrysler.  After learning the union would focus talks on them, Ford said in a statement Sunday that it has a strong track record of working collaboratively with the CAW and that they are confident they can work together to ensure the future of their Canadian operations.

At issue is the future of Canada's auto industry.

The auto companies say Canada is the most expensive place in the world to make cars and trucks, and they could move production south if the CAW doesn't cut costs.  Wages are a key issue in the talks and the union is proposing that new employees earn less only when they are first hired and then take longer to reach the top end of the wage scale.

The automakers have been pushing for a permanent wage reduction for new employees, similar to a deal the companies reached in the U.S.

Canada's advantages in the past, a weaker Canadian dollar and government health care, have all but vanished. In addition, the United Auto Workers union in the U.S. has agreed to steeper concessions than the CAW, making U.S. labor costs cheaper.

The federal Canadian and Ontario province governments worked in tandem with the U.S. government on auto bailouts in 2009 to maintain Canada's share of North American auto production. Canada's share peaked at 3.2 million cars in 1999, about 17.4 percent of North American production. In 2011, Canada produced 2.1 million vehicles, or about 16 percent.