Canadian Auto Industry Could Shrink If CAW Does Not Make Concessions

Is the Canadian auto industry about to take a major hit that could see its workforce shrink should it not give in to demands from Chrysler, General Motors, and Ford?  Contract talks between the Canadian Auto Workers and the Big Three Detroit car companies have reached a boiling point, with CTV News reporting that a strike could be on the way should an agreement not be reached by midnight, September 17.

Ford has come closest to terms with the CAW, but the union remains far apart from both GM and Chrysler.  Significant concessions such as a salary cut for those recently hired - salaries that will never again return to their previous level - are stalling talks.  Canadian auto workers are amongst the best compensated in the world, and the union is attempting to maintain its current standard of remuneration by asking for lower starting salaries that can eventually be worked up to top-tier hourly wages.  The car companies are arguing that Canada's compensation is an anomaly on the world stage and that the country's workers must be willing to economically re-align in order to stave off potential plant closings.

20 percent Chrysler automobiles are assembled in Canada - primarily in the Southern Ontario region - along with four percent of Ford and nine percent of GM vehicles.  The high Canadian dollar, which has risen 50 percent against the American dollar over the course of the past 10 years, has increased costs for U.S.-based car companies with a foothold in Canada.  Each brand has threatened to move operations south, depriving Canadian workers of jobs and cutting down on the size of the Canadian auto industry as a whole, but in practical terms such a shift would be difficult given plant capacity problems in America and the lengthy period of time that would be required in order to bring new facilities online.