Canadian Auto Workers Take Concessions at Big 3

In late April the Canadian Auto Workers reached a surprise agreement with Ford, almost five months before contract expiration and before workers even knew that talks were under way.

Union officials declared victory against the two-tier wages found in last fall’s Big Three auto contracts in the United States. But while the deal avoids the deeper wage concessions for new hires enacted in the U.S., it is a setback in the Canadian context.

New hires, who formerly started at 15 percent below the base wage and reached parity in two years, will now start at 30 percent less than full-time pay and take three years to catch up. In addition, new hires will no longer receive cost-of-living adjustments (COLA) until the end of the agreement, or supplemental unemployment benefits when laid off.

Further concessions for existing Ford CAW members include a wage freeze, no COLA through 2009, a loss of 40 hours’ vacation, and weakening of health care benefits. In exchange, workers get a one-time bonus of $3,500.


The CAW has long stood against givebacks, making this year’s closed-door, early negotiations and concessionary contract all the more shocking for some members. The initial announcement of a 78 percent “yes” vote was met with skepticism.

“We knew that there was no way it was that high,” said Euan Gibb, an assembly worker with CAW Local 707 in Oakville, Ontario. “[The union] took the approval rate of the parts facilities that voted almost 100 percent in favor and averaged that rate with that of both the production vote and the skilled trades vote.”

The parts units represent the smallest number of workers, which unfairly weighted their votes.

Within 24 hours union officials backtracked, saying that the contract was voted up by 67 percent—the narrowest approval in CAW history. The union then reached similar agreements with General Motors (ratified by 84 percent) and Chrysler (87 percent).

The Ford assembly plant in Oakville broke new ground by becoming the first CAW auto plant to vote down a union-sanctioned contract. Workers there rejected the agreement by 56 percent.

“We didn’t know they had been meeting,” said Gibb, who added that after years of overtime and hot sales for the factory’s vehicles, it didn’t seem like concessions were appropriate.

For several years Oakville workers have been pumping out popular crossover vehicles like the Ford Edge and Lincoln MKX, working mandatory overtime to meet production goals. The plant secured rights to produce the better-selling vehicles during a mid-contract negotiation with the company in 2003, when workers agreed to concessions in exchange for the new product.

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“The idea for pattern bargaining is to stand strong where you’re strongest,” Gibb said. “Oakville should be going forward, or at the very least, not go backwards.”

Gibb and others produced a leaflet encouraging a “no” vote if workers were not given a week to decide. At the ratification meeting, several members asked bargainers to go back to the table in the months left before the current contract expired.


In the wake of the disastrous Big Three settlements last year in the United States, both U.S. and Canadian auto workers hoped that the CAW would keep its promise and hold the line against two tier in Canada.

In pre-ratification talks, CAW officials cited the price of oil, the U.S. auto concessions, the rise of the Canadian dollar, and other economic woes as reasons for members to make givebacks.

But Sam Gindin, a former top CAW staffer and current contract opponent, contrasted that fearful chorus with the principles that first launched the union in the 1980s as an anti-concessions breakaway from the United Auto Workers. “Renaming the losses made in exchange as ‘cost savings,’ ‘offsets,’ or describing them as a ‘creative and nimble’ response, hardly negates the fact that the concessions in this collective agreement are as large as or larger than those the American UAW made in 1982,” wrote Gindin in the Bullet, an online newsletter.

“One of the factors that led to the CAW split was the UAW’s acceptance of the lump-sum payment while we said, ‘no, let’s stick with keeping our cost of living increasing with inflation,’” said Gibb. “That’s changed. From now through 2009 when we see food, oil, and everything getting more expensive, our wage will be frozen.”

The union’s rhetoric, he said, doesn’t match up with this contract’s reality.

“We can say on principle that we’re against two tier, but there’s no protection against two tier in this contract,” Gibb said. “It’s a temporary two tier.”