Chrysler, General Motors Auto Workers Agree To A Deal Similar To Ford's

May 16, 2008 9:43 a.m. EST

Toronto, Canada (AHN) - Canadian auto workers reached tentative agreements with General Motors and Chrysler. The deals are similar to Ford's which include three-year wage freezes, cost-of-living allowance hikes on the second and third years, reduction in vacation pay and lower rates for new hires.

The threat of job losses, like what 1,400 of GM's employees in Oshawa face in 2010, has made car plant workers more amenable to the less-than-ideal working terms. Workers agreed to the deal four months ahead of the expiration of their current agreement by September.

Buzz Hargrove, CAW president, told Canadian media that potential job losses motived the agreement.

Hargrove also announced the extension of GM's second shift at the Oshawa facility, sparing 900 workers from becoming unemployed. But the 900 will work only part time, two week on and two weeks off.

But the cost cutting measures of the automobile industry could only last for so long. Hargrove doubted whether major car makers can lose continue losing market share and survive.

For the three Detroit-based firms to survive in an industry reeling from high fuel costs and in a country going through an economic slump, Hargrove suggested moving their head offices out of the U.S. where labor cost is very high.