TORONTO - Canadian Auto Workers president Ken Lewenza says his union is prepared to help the North American automakers by finding "cost savings," but only if the federal government agrees to a national auto strategy that will address trade disparities in the global industry.
Lewenza said he still believes Canadian autoworkers cost their employers less than their U.S. counterparts due in large part to the benefits of Canada's national health-care system.
But he said a meeting with General Motors convinced him he would have to come to the bargaining table.
"They insisted that the CAW had to make some contribution similar to what their bondholders, shareholders, all of them are doing," Lewenza said in an interview.
He said that after six hours of debate the CAW's master bargaining committees for GM, Ford and Chrysler agreed to open "extraordinary contract talks" with the automakers, which have been beset by slumping sales and tight credit markets.
GM and Chrysler are in particularly bad shape, and will receive billions of dollars in government aid from the U.S., Canadian and Ontario governments once a funding agreement is reached.
However, Lewenza said the CAW will only come to the table if several conditions are met, including commitments by the carmakers on future manufacturing activity in Canada and the development of what he describes as "a comprehensive national auto strategy."
The CAW has argued for years that manufacturers in South Korea and Japan have an unfair advantage because they keep out North American competitors while the American and Canadian markets are largely open.
"If we don't deal with the question of fair trade versus free trade, then we're only putting a Band-Aid on a very difficult problem," Lewenza said.
He added that, if all the conditions are met, the CAW "would be forced to be part of the negotiations."
"Obviously we're being forced into it, but it's in the interests of our members not to ignore that what's going around us could put us at a competitive disadvantage -- and I emphasize could," Lewenza said.
Tony Faria, an auto industry specialist at the University of Windsor, has estimated that once new contracts negotiated by both the CAW and the United Auto Workers come into effect, Canadian employees of the Detroit Three will cost their employers about $27 an hour more than their American counterparts.
But the CAW has argued they actually cost their employers $7 an hour less. A recent union study also indicated that Canadian plants are more productive than U.S. plants, which the union argues helps to offset labour costs.
However, the UAW have already made several concessions to their employers, including a two-tier wage system, under which new employees will make substantially less than their more senior counterparts.
They have also agreed to all but end a much-derided job-bank program that let laid-off workers collect up to 95 per cent of their salaries, and will let the cash-starved automakers delay billions of dollars in payments to a union-administered trust set to take over health care for blue-collar retirees starting in 2010.
Lewenza said he doesn't want to discover that UAW concessions have left the CAW at a competitive disadvantage, and he's prepared to find "cost savings" if necessary.
However, "I absolutely refuse to speculate whether that will be wages," he said.
"We're prepared to be part of the solution, we're prepared to find cost savings if in fact we are at a competitive disadvantage, and we must do this by minimizing the pain of our members, by limiting our exposure," Lewenza said.
CAW members are in the first year of three-year labour contracts reached last spring with the Canadian subsidiaries of GM, Ford and Chrysler.
The union has said those contracts, done about six months early in anticipation of hard times, included labour cost savings that would be worth about $300 million in each of the three years.
