The president of the Canadian Auto Workers says he won't agree to slash labour costs by 25 per cent, despite a threat from Chrysler that anything less will force the automaker to pull out of Canada.
CAW President Ken Lewenza said Chrysler's demands would give it an unfair advantage over its competitors and fly in the face of a new agreement between the union and General Motors.
"We're not about to break the pattern established at General Motors," Lewenza told CTV's Power Play on Thursday.
The comments come after Chrysler president Tom LaSorda said Wednesday that the company needs US$2.3 billion from Ottawa, along with major sacrifices from the CAW and a big break on $500 million in back taxes in order to stay in Canada.
LaSorda added that Chrysler would be willing to pull out of Canada, where it employs about 10,000 people, if it makes financial sense to do so.
But on Thursday, Lewenza said backing down to LaSorda's demands isn't a possibility.
"Under no conditions will we break the pattern with General Motors. The idea of patterned bargaining is to make sure that the automobile companies aren't at an advantage or a disadvantage," he said.
On Wednesday, General Motors reached an agreement with CAW that included major concessions by the union, in hopes of getting federal bailout funds.
CAW members voted 87 per cent in favour of the cost-cutting contract that includes a wage freeze to September 2012, the elimination of an annual bonus and a reduction in paid time off, among other concessions.
"We cannot disadvantage General Motors nor will we disadvantage our CAW members at Chrysler corporation," said Lewenza.
The CAW has generally used its first deal with a Big Three automaker to set a pattern for agreements with the other two.
LaSorda said his company's labour costs are $70 an hour in wages and benefits for both current workers and retirees. He says it needs to be cut by $20 per hour to be competitive.
But Lewenza downplayed those comments and said that it makes economic sense to build cars in Canada.
"Canada is by far the most successful and competitive environment to manufacture vehicles," he said.
"It certainly sounds like an ultimatum to us: either provide us the loans or we're not going to be here, give us a tax exemption or we're not going to be here," he said.
Political response
Later on Thursday, Federal Industry Minister Tony Clement said that Ottawa won't hand Chrysler a blank cheque, despite the threat of the company pulling out.
Clement added that Ottawa will relentlessly review the automakers' bailout proposals to ensure that Canadian taxpayers aren't left on the hook.
Still, Clement added that Canada must act to protect the auto sector, which employs about 10 per cent of the country's workforce either directly or indirectly.
Meanwhile, Ontario's economic development minister tried to pass off Chrysler's threat to leave Canada if its demands aren't met as simply a worst-case scenario being presented as part of a bargaining process.
"I know Tom LaSorda, he's a great Canadian and he's not somebody who wants to be known as they guy who shut down Chrysler," Michael Bryant told reporters in Toronto on Thursday.
"It was a ham-fisted way of expressing the reality that, in the absence of an agreement, Chrysler's going to face critical challenges."
With files from The Canadian Press
