CAW pact details

Posted on April 25th, 2009 • by David Zatz

While Chrysler released a note saying that a tentative agreement had been reached with the CAW, no details of the pact were provided. The CAW, though, provided the following information.

Cost savings for Chrysler Canada are estimated at over $240 million per year, from the CAW members’ 12.5 million hours of work per year for Chrysler Canada. The agreement meets the benchmark established by the Canadian and Ontario governments, and includes all cost-savings provisions of the GM Canada contract as well as:

Eliminating semi-private hospital coverage.
Eliminating a one-time $3,500 vacation buyout negotiated in 2008.
Eliminating clawback reimbursement through the SUB program.
Eliminating employee car purchase and tuition rebate programs.
Increasing the waiting period for sickness and accident benefits.
Cutting the maximum dispensing fee for prescriptions.

The agreement also contains operational changes to raise productivity and efficiency in Chrysler’s Canadian operations (which are already the most productive for Chrysler in the world). This includes the adoption of the operating system used by Fiat in its production.

Finally, the agreement will try to administer retiree pension and health benefits (“legacy costs”) with more cost-efficiency. The pension contribution timetable will change, and a Canadian Health Care Trust (HCT) will be created to provide retiree health benefits (similar in principle to U.S. VEBA arrangements, although with several important differences).

CAW members working at Chrysler in Windsor, Brampton and Etobicoke will vote on the new contract in a series of meetings held over the next two days.