New contracts between the Canadian Auto Workers and U.S. automakers might threaten the future of Canada's auto industry, analysts say.

The Detroit News reported Friday that CAW Thursday announced tentative three-year deals with General Motors Corp. and Chrysler LLC. A Ford Motor Co. contract was ratified last week.

Because the deals don't save the automakers costs, analysts say the pacts could cost Canadian jobs in the long run. In addition, the weakening dollar has made it cheaper to build cars and trucks in America.

The tentative labor agreements do not include two-tier wage schemes similar to what the UAW agreed to in the United States, where many new hires will be paid about half the hourly wages of veteran employees, the newspaper said.

By avoiding second-tier wages, the CAW has created a costly gap in the price of labor relative to the UAW, said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich.

The union said it was able to secure the best possible deal for its members.

You're fighting like hell to hang on to what you have, and the companies are fighting for survival, CAW President Buzz Hargrove said. With the companies on a campaign to take away past gains, we decided all we could do as a union was lose.

Copyright 2008 by United Press International


Publication date: 17 May 2008   

Source: UPI-1-20080516-20060000-bc-canada-caw.xml

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