By on April 18, 2008

gunfight.jpgGM Canada is going on the offensive re: its contract negotiations with the Canadian Auto Workers (CAW) union this September. They've released a "background paper" claiming the total cost (wages, pensions, benefits, etc.) for one hour's work in Canada runs the automaker $77.75. Instead of comparing those wages to other industries in Canada or "core" U.S. GM workers' ($70/hour), the paper uses the U.S. transplants for comparison ($47.50/hour). Report on Business quotes GM Canada spokesman Stew Low: "The status quo just won't do." CAW president Buzz Hargrove responded with righteous indignation. "I've told Rick Wagoner, I've told the head people at Ford and Chrysler – all of them – that there's absolutely no way in hell [we'll agree to reductions in wages, health care benefits or pensions]." The CAW says it's willing to "look at" the amount of paid time off they get. GM claims CAW employees get 155 more hours per year off and 16 minutes break time a day than… the transplants. Fair enough?

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30 Comments on “GM Taunts CAW with U.S. Transplants’ Compensation...”

  • avatar

    Remember Eastern airlines? Buzz is taking a ride on the Eastern shuttle. In 1985, Eastern Airlines was the largest in the free world. Seven years later, it was gone. in 2005 GM was the largest in the world. Seven years later…?

    “Under Lorenzo’s tenure, Eastern was crippled by severe labor unrest. Asked to accept deep cuts in pay and benefits, Eastern’s mechanics and ramp service employees, represented by the IAM (International Assn. of Machinists and Aerospace Workers), walked out on March 4, 1989. A sympathy strike called by the pilots represented by ALPA (Air Line Pilots Assn.) and flight attendants represented by TWU (Transport Workers Union) effectively shut down the airline’s domestic operations. Non-contract employees, including airport gate and ticket counter agents and reservation sales agents, did not honor the strike. Due to the strike, flights were canceled, resulting in the loss of millions of dollars in revenue.

    “As a result of the strike, weakened airline structure, inability to compete after deregulation and other financial problems, Eastern filed for bankruptcy protection on March 9, 1989. This gave Lorenzo breathing room, and allowed him to continue operating the airline with strikebreakers. When control of the airline was taken away from Lorenzo by the courts and given to Marty Shugrue, it continued operations in an attempt to correct its cash flow, but to no avail. With the airline collapsing from debt, it ran out of money to operate on January 18th, 1991 following the run-up to the Gulf War. Over 18,000 employees lost their jobs and pensions in one day, not including the thousands laid off or furloughed prior to the collapse.

    An asset liquidation sale was commenced later that year and provided Eastern’s creditors with a remarkably good payout.”

  • avatar

    The reversal in the value of the US dollar vs. “everything else on planet earth” (including the Loonie/Canadian dollar) doesn’t help the CAW cause, either.

    The biggest winners in the original auto pact of 1965 (essentially opening up free new car trade between the US and Canada) had been Canada; more Canadian cars were exported to the US than were imported, and Ontario was the biggest and nearly only winner. Ontario “won” a lot of factories that it would never have obtained had it had a closed market. AMC’s Bramalea plant opened in 1986 (now manufacturing Chrysler 300, Dodge Challenger, Dodge Charger, etc.), Honda’s plant in Ontario, Toyota’s plants including one in Cambridge and another new one just west of there (can’t recall the town), the CAMI factory (Suzuki/GM) in Ingersoll….

    Now the shoe may well be on the other foot.

  • avatar

    The shoe is on the other foot. Buzz just refuses to accept the reality that with the auto companies on the verge of bankruptcy they cannot continue to provide the union members high wages and a gold plated benefit package. He is stuck in the past and going to fight the old union battles no matter what the cost. The damage is already done and the repurcussions will be felt long after Buzz is retired on his lucrative pension.

  • avatar

    Way back in about 1994, an American refrigeration manufacturing Company I worked for here in Canada got a 2 tier wage package into their plant in Tecumseh Michigan. Similar circumstances to automotive industry, large Japanese manufacture opened a modern plant with low wages in the American South and flooded the market with low cost product. As quality manager I often had to go to the Tecumseh MI plant and talk to operators on the line. If you asked the wrong guy a question, one working at the lower tier, you always got the same answer, ask that guy, they don’t pay me to think. Next contract here in Canada the company attempted to get in the 2 tier system. The exisiting employees who were all had about 20-25 years seniority, would never see their wages drop, but new hires would come in at about $12 and hour instead of $18. It was a CAW plant and their stand was not to allow 2 tier wages. They told the employees to vote against it and the Union would back them. National reps even showed up at the voting to ensure the people felt supported. Well they voted against 2 tier, the plant closed, our work went back to Michigan and now it is 14 years later and if you look up Tecumseh Michigan on the web, you will see that the 2 tier system did not save the US plant workers either.

  • avatar


    The other Toyota plant is in Woodstock.

  • avatar

    Someone ought to remind Mr Hargrove of rule number 1 of negiotiating:

    “Negiotiating only works when you have something to bargain with……”

  • avatar

    That is not quite true Katie.
    Buzz has the choice to negotiate, he just chooses to negotiate only on his terms. What he lacks is the leverage to force the Big 2.8 to bend to his demands. Buzz will destroy the whole industry before he will give up on his oldtime union beliefs. What he is really looking for is a Senate seat in Canada, which is why he has aligned himself with the Liberals and stabbed the old NDP union party in the back. The man is really despicable.

  • avatar

    Remember Eastern airlines?

    While the airline to auto comparison isn’t perfect, there are striking similarities.

    Back in the 80’s, it used to be brutally expensive to fly from smaller cities in the US. And airline employees were very well compensated when benefits were included. (I don’t think airline employees’ free travel benefit (on their own airline) was taxable income – sort of like UAW discounts on cars today).

    But the internet’s ability to compare, deregulation of routes, & brutal price competition destroyed the likes of Pan Am and Eastern.

  • avatar

    bluecon :
    April 18th, 2008 at 8:45 am

    Buzz just refuses to accept the reality that with the auto companies on the verge of bankruptcy they cannot continue to provide the union members high wages and a gold plated benefit package.

    Are you volunteering to bell the cat by standing out front of the Ren Cen holding a sign saying the same thing?

    I’m not at all sympathetic to the unions, but Rick Wagoner Jr. banked a LOT of money last year.

  • avatar

    If the Big 3 were smart, they’d wait until a particularly bad sales month and attack the UAW as well. All a strike would do is allow sale to catch up with production at this point. THough I have to say, I’m not sure the money they save would be put to good use anyway.

  • avatar

    I spoke to a good friend who works in the GM Oshawa plant about the 2 tier wages idea. His opinion was that if the wages were to be reduced to say $14/hr. for him, he would go drive a truck instead. His thoughts were that GM can close the plant if that’s what they want to pay. Like Buzz, he is prepared to accept less time off but not a deep reduction in pay. Now he is not a dyed-in-the-wool union fan by any means and is a soft spoken gentle person but he sees no point in accepting low wages just to keep GM in Canada. I would say there are many who would share his opinion in the rank and file. BTW, people may not like Buzz much (I am not a fan either) but he is doing exactly what he is being paid to do.

  • avatar

    And the band played on.

    Someone should tell the CAW that there are places GM could move the factories to that won’t cost 77 an hour to build a car at.

  • avatar


    I can’t help thinking if your friend left the plant to drive a truck he wouldn’t be any better off. I’ve heard on NPR that truckers are getting very badly squeezed by fuel prices. Whatever happens, good luck to him.

  • avatar

    This is not news to the workers, they knew this day was coming and darker ones are ahead. the sooner they start making moves, of any kind, the better off they would be.

    Sad as it is, the rest of us are not responsible for their success or happiness today.

  • avatar

    I spoke to a good friend who works in the GM Oshawa plant about the 2 tier wages idea. His opinion was that if the wages were to be reduced to say $14/hr. for him, he would go drive a truck instead.

    The thing is, under the UAW agreement, existing employees’ wages aren’t cut. Yes, they’re offered early retirements or cash incentives to quit, but if they stay their wages stay the same. The two-tier wage structure and $14/hour wage are for the new workers they hire to replace them.

    You know GM can’t afford to give the CAW a better wage structure than they gave the UAW. They’d have a mass mutiny on their hands if they did. Buzz is going to have to back down, or a lot of Canadian jobs will end up south of the border (and I don’t mean down Mexico way).

  • avatar


    Good point about personal responsibility for your future.
    For six years I worked for a company while the work force shrank to 20% of the size at my hire.
    I was looking for a different position for 4.5 years and then during a year of lay-off.

    I had a choice to whine and bitch or be proactive, even though I didn’t find a position “in time” (I limited myself too much geographically at first) I didn’t sit around waiting for someone else to “fix the problem”.

    It doesn’t matter who is right or wrong if the ship goes down, what matters is if you got your family to another ship, port or at least a life boat (we did have the life boat set up well).

    Any employee of the Debt 3 who is not measuring their options already is a fool.
    I feel for their trouble but NOBODY is going to ride in on the white horse and save them.

    Been there,


  • avatar
    Gardiner Westbound

    GM and the CAW are grandstanding for the rubes, again.

    The actual hourly labor cost differential for active Canadian autoworkers and their U.S. counterparts is a resolvable $7. Retiree pension and benefits are inflating the reference $77.75 Canadian hourly rate. For decades GM deferred retiree costs to overstate earnings, pleasing Wall Street and boosting executive bonuses. The time bomb exploded.

    In the U.S. GM agreed to pay $35-billion into a Voluntary Employee Beneficiary Association (VEBA) trust to meet these and other contracted benefit costs. A similar solution will be worked out in Canada.

    That much money will pitch the sharks into a feeding frenzy. CAW members will need serious protection from union malfeasance. The incompetent, and perhaps politically tainted, Financial Services Commission of Ontario (FSCO) is the watchdog. Good luck with that one!

  • avatar

    Mj0lnir :
    April 18th, 2008 at 11:05 am
    “Are you volunteering to bell the cat by standing out front of the Ren Cen holding a sign saying the same thing?

    I’m not at all sympathetic to the unions, but Rick Wagoner Jr. banked a LOT of money last year.”
    There is lots of blame to go around. No I wouldn’t stand in front of the Ren Cen, since my view is that if these people will not take the steps to save themselves, even in these desperate conditions their fate is their own fault. And if Buzz is so simple he cannot see the writing on the wall he should not be making these decisions that will affect thousands of peoples lives. (And yes I do think Buzz is a simpleton)

  • avatar

    News flash here: We have a 2 tiered system in place right now.I work at the Oshawa plant as a dock tech.Yes indeed I’m well rewarded.I do detect a little envy in some of the posts.I guess thats to be expected.
    However the kid that sweeps the floor makes less than half of what I do, as do the shunt drivers.
    They are employed by another company.Along with the outside maintenance people.Thats the price we at CAW local 222 paid to get the Camaro.

    Raise your hand anybody that thinks we can sell 200,000 Camaros next year?Right, how about Silverado/Sierra crew cabs?Ya gotta be nudgen 4 bucks a gallon in the states eh? Well we do have the Impala, and oh ya the Lacrose.

    Do the math

    9000 hourly rated employees,and no F—EN PRODUCT!that gonna sell in big numbers.

    Buzz is being Buzz and doing what he is being paid to do.I guess we well see in Sept.

  • avatar

    “Buzz is being Buzz and doing what he is being paid to do.”
    The problem with Buzz being Buzz is that there will be almost nothing left of the Big 2.8 in Canada when he is done.

  • avatar


    I appreciate the comments. I too have passed through that sort of life disruption. It isn’t fun, and I wouldn’t wish it on anyone. And we were able to keep our home. The fact of the matter is none of us can afford not to be thinking in terms of contingencies least of all CAW and the General himself.

  • avatar

    Those of you who are down on union auto workers for what they make need to pause and ask what happens if their pay is cut in half. Anyone care to speculate about the economic fall out. You may not get your pay directly from the auto business but it touches you. Autoworkers with only half a paycheck can’t pay their mortgage, invest in a 401k/RRSP, pay their property taxes, eat in restaurants, buy toys, and the list goes on.

  • avatar

    I think that management has a point here.The US transplants have been very successfull.Their products and marketing top notch.
    So we slash hourly compensation to bring it in line with the transplants,fair enough.

    Lets do the whole package .First off slash the useless layers of do nothing management.Bring that in line with the transplants.Dump all of the incomptant yes men.Now you got about 50% less snouts at the trough.Next up cut ALL pay by about 25 to 40%.Maybe they could give up the company supplied Escalade with free gas.Let the top dogs drive,say a customers new stripped down Impala home.The next day he could report back on defects.
    Better yet let him take it to a dealer.Isn’t that what the transplants do?

    Then and only then would us low lifes on the floor believe anything that one of managements mouth pieces have to say.

  • avatar

    Perhaps the rank and file would be more receptive to reductions in pay/benefits if they felt they weren’t the only ones taking it on the chin. Lets be real, the vast majority of the American auto industry’s problems have been created by management, or lack thereof. Back it the day, poor UAW workmanship played a big part, but assembly quality has improved vastly. Today, there is way too much assembly capacity because management has not designed enough vehicles that people want to buy. If GM’s product lineup sold as well as Honda’s, the industry could support the wage package that the UAW members get. So, maybe the top level executives should take a 50% pay cut, too. These are the people that make the bad choices and then get to leave with a golden parachute. I have no problem with sky high executive pay if you do your job properly, which means designing cars that sell because the buyer wants it, not because you took a loss on it just move it off the lot.

  • avatar

    I amazes me to read comments obviously relishing the loss of pay by workers. Why? Isn’t it 2/3 of the US economy is consumer driven? So as increasing numbers of decent/well paying jobs disappear, what will happen to our standard of living? I do not resent people who do good work being well paid.

    As for Eastern Air. My next door neighbor was an Eastern pilot. Eastern never had a chance. When Continental took control, Continental ‘bought’ Eastern’s reservation system and charged Eastern to use it at escessive rates. Eastern had to buy fuel from Continental at excessive rates. Thus Eastern was bled by Continental.

    Everyone knows where this is headed. Jobs will continue to be offshored and goods imported until our currency and income levels preclude importing. Then I guess we can stand around an talk about how it was the fault of the greedy workers who refused to work at Chinese/Mexican wages even though they they had to pay US prices for everything they bought. We are Rome.

  • avatar

    It amazes me to read comments obviously relishing the loss of pay by workers. Why?

    Those who derive enjoyment out of someone else’s losses are insecure about themselves and feel that they are above them, and that their line of work is superior to jobs such as manufacturing. Hopefully we reap what we sow and those smug people will someday feel the degrading humility of being outsourced or made to feel worthless. Years ago in college we had to pick assignments that would mirror real world scenarios. I was required to be homeless for three days. Any money would have to found by whatever means possible. I think everybody should have to experience something like this. It is very easy to look the “bum” in the eye and scream “get a job”.

  • avatar

    The death of the Big 2.8 is their fault. Why try to blame the taxpayer/consumers. I have worked in the Big 2.8 plants for years, and to see the laziness, it is quite unbelievable.

  • avatar
    Rear-Wheel Drive

    Buzz is probably all worked up because he can see the Oshawa facility in decline in future years. They expected to get the 2010 Chevrolet Impala/Caprice off the long wheelbase WM-platform Zeta from Holden in Australia.

    It appears that GM have cold feet on this car – because a FWD equivalent would get 1 (count’em!) mpg more!

    Not a good enough reason to cancel a new product that every GM enthusiast has been clamouring for for years. To meet the new CAFE regs, they are going to have to do a major remix of their product lines – probably cutting truck and SUV production in favour of cars. 1 mpg ain’t going to cut it! (As you can see by my handle, I admit a certain amount of prejudice on this one.)

  • avatar

    Relish is a pretty strong word, but I would certainly be counted in the “lack of sympathy” department. $77/hour is unsustainable, and the assumption that it should be is disconnected from reality. And the supposed dependence of the economy on such artificial pay scales is not a justification to support it.

    None of this implies that the Management isn’t equally at fault.

  • avatar

    The way I see it, anytime that Buzz is upset and doesn’t get what he wants, non-CAW Canadian and Ontario taxpayers typically win.

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