$700-million Chrysler plan at risk, union says

GREG KEENAN | Globe and Mail Update

Chrysler Group is threatening to scrap a $700-million future investment at its Brampton, Ont., plant, union officials say, in the latest example of how the sweeping restructuring of the North American auto industry is forcing workers and their unions to make difficult choices.

Chrysler Group, the U.S. division of DaimlerChrysler AG, has told the Canadian Auto Workers that a plan to add a new model in Brampton later in the decade won't go ahead unless workers at the plant reverse a decision they made last month and approve contract changes that will cut their pay, CAW officials said. Not only that, they said, Chrysler told them it will retool a U.S. plant to assemble the vehicles now made in Brampton unless the workers change their minds.

“It's hardball,” said CAW president Buzz Hargrove. “It's probably the hardest we've seen.”

The auto maker has been negotiating with the union on what it has been calling “Project X,” which would increase output in Brampton by between 40,000 and 50,000 vehicles annually and maintain the plant on three full shifts, said Bob Chernecki, an assistant to Mr. Hargrove who has responsibility for the union's dealings with Chrysler.

Industry sources said the vehicle in question is likely the Chrysler Imperial, a new flagship sedan for the Chrysler brand that was first unveiled at the 2006 Detroit auto show.

The project “would have had our plant building four or five different models, which shows how flexible the operation is, and would have ensured that it would have had consideration for other products beyond the 2010-2011 period,” Mr. Hargrove said.

But adding production of the Chrysler 300, Dodge Charger, Challenger and Magnum to a U.S. plant would threaten the future of Brampton.

“They're saying by Wednesday of next week, if there's no change in the decision in Brampton, the board of directors of DaimlerChrysler will make a decision on which U.S. plant gets the commitment for retooling,” Mr. Hargrove said.

Stuart Schorr, a spokesman for Windsor, Ont.-based DaimlerChrysler Canada Inc., would not comment on the dispute.

Workers in Brampton voted down the proposed changes to their contracts just days after DaimlerChrysler unveiled a restructuring plan for its U.S. division that will eliminate 2,000 unionized jobs in Canada and 13,000 over-all across North America, and could include the sale or spinoff of the division.

The Chrysler moves follow even more drastic cuts made at Ford Motor Co. and General Motors Corp., which are eliminating tens of thousands of jobs and closing dozens of plants in Canada and the United States as the auto makers adjust to years of market share declines, mainly at the hands of Japan-based rivals.

While cutting jobs, closing plants and losing billions of dollars, Ford and GM have also persuaded the United Auto Workers union in the United States to make changes to health care deals, thus increasing costs of health care for union members, while reducing expenses for the companies.

The UAW has refused to provide similar concessions to Chrysler.

In Canada, the CAW agreed to the outsourcing of hundreds of construction jobs and other changes in order to win investment at a GM plant in Oshawa, Ont., for the new Chevrolet Camaro. That deal is one of several examples in which workers have been asked to give up hard-fought-for contract provisions in return for the promise of new investment.

The changes that Chrysler wants in Brampton relate to what are called alternative work schedules, under which employees at the plant work for eight hours a day, but are paid for eight hours and 48 minutes. The auto maker wants to eliminate that shift premium, outsource some janitorial jobs and amalgamate some skilled trades positions.

Ending the shift premium would cost workers about $5,000 a year apiece, Mr. Chernecki said.

At a Lear Corp. seat component plant in Kitchener, Ont., workers agreed to freeze their wages until 2010, give up a $1,000 vacation bonus and accept reduced premiums for working afternoon and night shifts. They also approved a new contract that extends the probation period of new employees to three years from two years, and cuts the wage rate of those employees to 70 per cent — from 85 per cent — of the base wage rate for more experienced workers.

That agreement is designed to make the Lear plant more competitive and give it a better chance to attract new business, such as parts for the Chevrolet Camaro and other new cars GM intends to build in Oshawa, Ont., as well as the Challenger that Chrysler will assemble in Brampton.