TORONTO — The Canadian Auto Workers union reached a tentative agreement with General Motors Corp. for a new three-year labor contract, avoiding a strike against the auto maker, reports a wire service.
The agreement includes a 3% wage increase in both the first and second years, and a 2% wage increase in the third year. It also includes a signing bonus of 1, 000 Canadian dollars (US$632) and an increase in vacation pay plus enhancements to certain benefits. GM’s 18,700 hourly paid employees in Canada currently earn an average of C$27.70 an hour.
GM agreed to make certain investments in Canada totaling about C$800 million, a demand the union sought to create jobs. GM plans to invest in a powertrain- components operation and related work in St. Catharines, Ont., creating about 328 jobs. The company plans to begin producing in 2004 a new full-size truck model at the Oshawa, Ont., assembly plant, and complete a paint facility aimed at enabling more vehicle production in Oshawa. Union officials said the paint shop will hopefully lead to an added third shift at one of GM’s car-assembly lines in Oshawa.
Union president Buzz Hargrove said the agreement “meets the concerns and needs of our members.” GM of Canada president Michael Grimaldi said the company is ” pleased with the agreement,” which will allow the auto maker to “continue the momentum that we have gained here in Canada” in terms of productivity and vehicle quality.
The agreement is subject to ratification by union members at a vote this weekend. The union will then turn to either Ford Motor Co. (F) or DaimlerChrysler AG (DCX), where talks are expected to be more difficult. Those companies plan to close certain of their Canadian operations, while the union has demanded new products to preserve jobs.