Chrysler Canada’s Brampton car assembly plant has secured at least two shifts of work until 2016 under the terms of an agreement reached this week between the Canadian Auto Workers and the company.
But the deal put on ice, at least for now, lost any hopes of a third shift being added at the Brampton plant. That would have added 800 jobs to the 2,800 people currently employed by Chrysler in Brampton.
In the deal, Chrysler agreed to maintain five shifts in Canada — two in Brampton and three in Windsor – during the life of the four-year deal.
CAW president Ken Lewenza told YourMississaugaBiz.com he was pleased with the outcome for Brampton.
“Two shifts for the lifetime of the agreement,”Lewenza said. “The 300, the Challenger and obviously the Charger are very successful vehicles for this corporation. That plant is incredibly important.”
But market conditions simply didn’t support the case for a third shift at this point, he added.
“If we ever get an opportunity where volumes go up we’ll argue for the third shift the same way we did a few years ago when the market demands substantiated.”
The four-year deal announced late in the evening means the CAW reached new similar contracts with all three big Detroit-based carmakers, agreeing to wage and pension concessions that helped General Motors, Ford and Chrysler compete in an increasingly cut-throat North American car industry.
The agreement will put a lump sum of cash in the hands of the Chrysler workers in Brampton and Windosr. The deal includes a $3,000 bonus for members after ratification and cost of living lump sum payments of $2,000 in December of each of 2013, 2014, and 2015.
Lewenza said the new deal with Chrysler protects pension benefits for current workers but new employees will start at $20.40 an hour, which is equal to 60 per cent of the current base rate, and will grow into full compensation after 10 years.
Chrysler workers at plants in Brampton, west-end Toronto and Windsor will vote on the deal this weekend.
Chrysler – the smallest and weakest financially of the Detroit Three carmakers – had sought major labour cost savings from the union but eventually agreed to the “pattern bargaining” wage and benefits deal the union had reached with Ford and General Motors.
GM and Chrysler both restructured in 2008 and shut down plants and cut jobs to avert bankruptcy, with the help of billions of dollars in aid from the U.S., Canadian and Ontario governments.
Since then Chrysler has introduced new models and had a jump in sales under its new owner — Italy’s Fiat auto company.
In the deal, Chrysler agreed to maintain five shifts — two in Brampton — of assembly operations and about 7,500 jobs at the Brampton and Windsor plants until 2016.
Lewenza said he was pleased the company planned keep its operations stable in Brampton. “Two shifts for the lifetime of the agreement,”Lewenza said.
“The 300, the Challenger and obviously the Charger are very successful vehicles for this corporation. That plant is incredibly important.”
Tony Faria, a management professor at the University of Windsor, said the “CAW clearly was the winner” in the contract talks with the three carmakers, making only “incredibly minor concessions.
“The CAW clearly came out much better than the Big Three did,” said the Director of the Office for Automotive Research at the Odette School of Business.
Faria said that despite its tough early stand, Chrysler did not want a strike since more than a fifth of its North American production comes from Canada.
“They can’t afford a strike, they can’t afford for 25 per cent of their production to shut down,” he said.
For workers in Brampton and Windsor, Faria said any concessions would have very little impact on the local economy because manufacturing jobs still pay much more than retail and service jobs.
“They’re still well-paying jobs even though the new hires aren’t at the CAW full pay rate,” said Faria. “Won’t see any, any, any shortage in applications because unemployment is still high. Auto jobs are still going to attract a lot of interest.”
CAW members at Ford voted 82 per cent in favour of their agreement at ratification meetings last weekend and union workers at GM are expected to ratify the deal this week.
Looking ahead, Lewenza said the CAW will keep a close eye on sales to determine if they’ll argue for more jobs in future contract negotiations.
“If they continue to build on increasing market share then there’s potential,” he said. “It’s all about market share.”
Chrysler has operated in Canada since 1925 and employs about 8,000 people.