September 14, 2012 / 6:13 PM / 6 years ago

Chrysler CEO says far from a deal with the CAW

DETROIT (Reuters) - Chrysler Group LLC Chief Executive Sergio Marchionne on Friday warned negotiators for the company’s Canadian hourly workers that they need to be more realistic in their expectations for a new labor deal and said there was still a long way to go in reaching a deal.

“The facts are the facts and I think that ignoring them or sweeping them under the carpet is not going to make anybody’s life better,” he told reporters at a United Way of Southeastern Michigan press conference. Marchionne is the chairman of that charity group.

“My sincere hope is that we all come to the stark realization of where we are and then we move it on from here,” Marchionne said.

Marchionne did not provide specific details but in the past has said that the manufacturing costs in Canada, which he calls the highest in the world, must be addressed in the current talks.

Chrysler, General Motors Co (GM.N) and Ford Motor Co (F.N) are in talks with the Canadian Auto Workers union (CAW). Chrysler is majority owned by Fiat SpA FIA.MI.

The CAW has threatened an unprecedented simultaneous strike at all three automakers should it fail to reach a contract agreement with at least one company by the union’s strike deadline of 11:59 p.m. EDT next Monday (0359 GMT, Tuesday).

The CAW on Thursday offered Chrysler, General Motors and Ford concessions on wages and pensions for new hires, yielding ground that might not overly upset the voting current members of the union.

That does not appear to have been nearly enough, the CAW and Marchionne essentially said on Friday.

The CAW, in a flyer issued Friday morning to its 20,000 members, said the talks continue, with little progress.

“To date, little success has been made, with the union and the companies still very far apart on a number of fundamental issues,” the CAW said.

The union said it is determined to resist the automakers’ steadfast attempts to force deep concessions on both existing and future workers.

Marchionne said: “We have made some progress. There is a long road to travel between now and conclusion.”

The concessions proposed by the CAW allow for new hires to be paid less than current workers. This is the so-called “two-tier” wage scale the three Detroit automakers and the U.S. union United Auto Workers have used for the past several years, as a way for them to bring labor costs closer to those of foreign automakers with U.S. plants.

Chrysler accounts for about 8,500 to 8,800 of the CAW’s 20,000 unionized workers. Chrysler’s Canadian operations account for about 26 percent of the company’s North American production.

In August, Chrysler’s auto sales in Canada were 20,569, putting it third behind leader Ford at 25,461 and GM at 20,170 vehicles.

Additional reporting By Euan Rocha in Toronto; Editing by Gerald E. McCormick

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