Amid pending labor strikes among members of the Canadian Auto
) union, Michigan automakers have each made statements that show a
potential battle on the horizon.
) had been the first target for negotiations, while General Motors
) has shown little interest in discussions. Chrysler (OTC:
) has mentioned
pulling out of Canada entirely
As of Monday evening, the CAW avoided
potential strikes against the automakers
by extending contract talks indefinitely with General Motors and
Chrysler while reaching a tentative agreement for four years with
CAW's Ken Lewenza has been very vocal about the myriad of issues
that he feels are too numerous for the car companies to ignore, and
as long as talks continue to make progress, the labor strike will
The finer points of the deal are as follows: Ford will provide
the union workers (more than 7,000) with payouts of three lump sums
over the span of the four year agreement, along with a $3,000
signing bonus. No cost of living increases will be administered,
and in response, the CAW has agreed to decrease the starting wages
of new workers. Top pay goals can still be achieved to the chagrin
of General Motors and Chrysler, which are trying to implement a
second-tier wage structure. The CAW is not willing to compromise on
its top-pay structure, despite the automakers providing
Canada-specific amendments to the current contracts.
A large portion of the Canadian economy depends on the three
domestic automakers, as well as Toyota (NYSE:
) and Honda (NYSE:
) and though a strike would certainly call attention to the union,
it could be detrimental to the Canadian workforce.
The CAW targeted Ford first, as it believed
the company was the best prospect in regards to
meeting the CAW's demands
. Should talks with General Motors and Chrysler not continue to be
productive, the CAW is required to give a 24 hour notice before
workers go on strike.
Shares of Ford are down 0.58 percent premarket and down 3.44
percent year to date, while General Motors is up 1.81 percent
premarket and up 17.41 percent year to date and Chrysler is up 1.99
percent premarket and up 36.38 percent year to date.
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