TORONTO – An overwhelming majority of workers at Chrysler Canada voted to accept a labor concession deal reached between their union and the beleaguered automaker, a union official said Sunday.
The deal was approved by 87 percent of those who voted on the weekend.
Canadian Auto Workers President Ken Lewenza said his members understand better than anyone the current turmoil of the auto industry.
Chrysler and the Canadian government told the CAW that it wanted concessions from the union that would make the labor costs competitive with non-unionized Toyota in Canada. Lewenza said that has been accomplished.
Meanwhile, in Detroit, the United Auto Workers union said Sunday it has reached a concession agreement with Chrysler, Fiat and the U.S. government.
Chrysler now must cement a technology-sharing alliance with Fiat SpA. It also needs to provide a restructuring plan to governments in both countries that will enable it to qualify for government loans to keep it afloat.
Lewenza said the deal with CAW will save Chrysler about $198 million even though it doesn't cut base wages or pensions. The savings are achieved in areas like increased productivity. Labor and management said the cuts amounted to the $15 an hour in savings the company was seeking.
The deal eliminates Christmas bonuses, semiprivate room hospital coverage, certain drug fees and a one time vacation buyout of $2,885. It also reduces break times and vacation time.
The salaries of new workers will also increase more slowly than they do currently, and more room will be made for part-time and contract workers in Chrysler plants.
Chrysler employs 8,500 Canadian Auto Workers.
Lewenza has said Chrysler told him the deal could be a significant factor in Chrysler's efforts to avoid a bankruptcy filing. He said even if Chrysler does declare bankruptcy in the U.S. and Canada, the deal should hold up.
The Canadian government and Ontario provincial government have already given Chrysler Canada $618 million of a $824 million loan and have promised further support if a viable plan is put forward by April 30.
The Canadian government has said Chrysler and General Motors must present plans that maintain the 20 percent Canadian share of production. The auto industry directly employs over 150,000 Canadians plus another 340,000 Canadians indirectly.
Canadian Government officials expressed support of the new Chrysler-CAW deal on Friday, but said more steps remain.