Three days before the expiration of the ultimatum that the Canadian Auto workers’ union (CAW) has issued to GM, Ford and Chrysler, the union has made some concessions over the new contract in order to avert a simultaneous strike at all three carmakers’ Canadian plants as it has threatened.

The CAW is proposing a lower starting wage for newly hired workers and a longer time for them to reach the top of the pay scale. Moreover, unlike current workers, new employees will contribute to their pensions but will still be entitled to a defined-benefit, not a defined-contribution pension.

CAW National Secretary-Treasurer Peter Kennedy said that the union is also ready to “relax” its “30-and-out” rule for new recruits. Instead of being allowed to retire after 30 years of work with full pension, newly-hired personnel will be able to retire after 30 years only if they have reached a certain age.

Auto industry expert and University of Windsor professor Tony Faria says that the concessions made by CAW weren’t much of a surprise, since they concern new hires.

“I thought that was an area where the CAW certainly could do something, as with the new hire they are not taking away anything from the existing worker, who has to vote on ratifying the contract”, he told Reuters.

Faria added, though, that in his opinion this was a right move because, otherwise, “there was no hope for this contract being settled”.

What the CAW is not willing to accept under any circumstances is the two-tier system that the Detroit 3 want to implement on their Canadian plants. The union’s argument is that employees doing the same work should receive the same salary.

CAW President Ken Lewenza has already stated that the automaker’s goal is to sign same contract they did last year with the UAW in the US.

This included no wage increases and maintained the two-tier system. On the other hand, it included signing bonuses and profit sharing, which Lewenza said had not been offered by the Detroit 3 to the CAW.

GM spokeswoman Faye Roberts commented: “We are optimistic that we can continue to work together to overcome challenges, find creative solutions and improve our current position.” Her Chrysler counterpart wouldn’t comment on the issue and Ford didn’t even respond to a comment request.

Apart from the concessions the CAW is ready to make, the fact that GM already has a senior official on the table and as Kennedy said, the other two would follow is an encouraging sign. It had better be, because the clock is ticking…

By Andrew Tsaousis

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