With a GM deal ratified, union wants FCA to invest in Canadian manufacturing as part of its contract

With a promise from General Motors to spend $554 million to expand operations in Canada, the union representing Canadian autoworkers now turns its attention to Fiat Chrysler Automobiles, vowing to wrestle more commitments.

Unifor members at GM on Sunday voted 64.7 per cent in favour of a new four-year contract that includes wage increases, signing bonuses and makes 700 temporary workers permanent, but ends defined benefit pension plans for future hires – a key company demand.

The union made winning new product commitments for Oshawa the central issue in this round of bargaining, but some workers questioned whether it guarantees the future of the plant, given GM will ship partially built Chevy Silverado trucks for final assembly here, Oshawa This Week reported.

Truck sales have been strong but could drop if fuel prices rise. National president Jerry Dias said with the $400 million investment, Oshawa will be the only GM facility in North America that can make both cars and trucks.

“The Silverado is the No. 1 selling GM product, period,” Dias told Oshawa This Week. “If I’m going to get a product, I want the No. 1 selling product.”

In St. Catharines, the union boasted of winning additional work to build V6 engines in Canada instead of Mexico.

The union did not release the turnout numbers among its 3,900 members, but a spokeswoman said “well over half of the membership” voted on Sunday.

In the deal with GM, Unifor members will receive a 2 per cent hike in hourly earnings and another 2 per cent in September 2019. In addition, there is a $6,000 ratification bonus, along with lump sum payments totalling $6,000 at specific points during the contract, and an adjustment to the schedule for new hires to catch up to the pay grid of existing workers.

But the union gave in to GM’s demand that all future hires be put on a defined contribution plan, which does not offer a guaranteed payout at retirement, but depends on how investments fare. In the previous contract, there was a hybrid pension plan for new hires – a mix of defined contribution with defined benefit, that has a fixed payout, but GM did not hire any new employees in the past four years.

Under this contract, 700 temporary workers will become full-timers. But they will receive a defined contribution pension. Workers will contribute 4 per cent of earnings that will be matched by GM, and if they add an extra 1 per cent, the company will add 2 per cent.

Armed with that new agreement, Unifor has now picked Fiat Chrysler as its next target to hammer out a deal in what’s known as pattern bargaining, using the GM deal as a template for the other automakers.

The contract at Fiat Chrysler, which covers 9,750 Unifor members, expired on Sept. 19, and the union has set a strike deadline of 12:01 a.m. Oct. 11.

The union wants to secure work for the Brampton assembly plant, which builds the Chrysler 300, Dodge Charger and the Dodge Challenger, and the Etobicoke casting plant. The Brampton plant, with 3,300 members, needs upgrading including a new paint shop, and the Etobicoke plant, with 450 members, has seen volumes for component parts drop due to falling sales of the Chrysler 200 and Dodge Dart sedans.

In Windsor, the company has invested $3 billion in the minivan plant that now builds the Dodge Caravan and Chrysler Pacifica, which employs 6,000 Unifor members.

“It’s the same battle over investment,” said Kristin Dziczek, director of research at the Center for Automotive Research in Ann Arbor, Mich., but she expects Fiat Chrysler to push for changes to pensions for new hires.

“That will be a demand with the other two (automakers),” she said. “It limits long-term risk for the company. But it puts more risk on the worker, but it’s the way of pensions in these times. There are very few industries where a defined benefit pension continues.”

But Dino Chiodo, Unifor’s master bargaining chair for Fiat Chrysler, warns it’s not a given that the union will concede the hybrid pension.

“We won’t just accept it and go,” said Chiodo, arguing that the union wants to secure commitments for all three facilities. “There are pieces to work through.

“If they don’t look at putting a paint shop in Brampton, why would we look at giving up the pension?” he argued.

Fiat Chrysler declined to comment on the talks, which formally began on Monday, issuing a statement instead. “FCA Canada is committed to working collaboratively with Unifor to develop an agreement that balances the needs of Unifor and our employees, while enhancing the company’s competitiveness in Canada,” it said.

Tony Faria, director of the Office of Automotive and Vehicle Research at the University of Windsor, believes workers at Fiat Chrysler will receive the same pay increases as their GM counterparts, because that’s one of the principles of pattern bargaining.

“The template is there,” said Faria. “There may be a little bit of push and shove, but I can’t see any way in the world that Fiat Chrysler workers won’t get a 2 per cent increase, and 2 per cent (later in the contract).”

However, he said there could be different in lump sum payments, given Fiat Chrysler is “the least financially sound” of the Detroit Three, carrying big debts.

“But I do not think there will be a strike,” Faria said, given minivan sales are strong. “I don’t think they want to or can afford to lose minivan production or sales.”