By on October 1, 2012

Workers at Chrysler plants in Windsor and Brampton, Ontario ratified the CAW’s labor agreement by an overwhelming majority, despite a lack of new product or investment at either plant.

A new paint shop and a third shift at the Brampton Assembly Plant were rumored in the run-up to the deal, but neither materialized. While current jobs are protected under the agreement, what happens after its expiration at the end of 2016 is now the question on the minds of everyone from plant workers to industry observers.

When we last left off, I put forward the theory that Chrysler could move production of the LX cars to Italy, alongside the rumored baby Jeep that is thought to be part of their plan to export Italian-built cars to North America. TTAC readers suggested that this was a stretch, and the more likely candidate was Mexico. This isn’t out of the realm of possibility, but the question of “what will be built in Italy?” is a big question mark staring us all in the face.

In the mean time, CAW President Ken Lewenza will pursue his “National Auto Policy“, which demands that the government devalue the Canadian dollar, suspend free trade talks with Japan and South Korea and take equity stakes in OEMs. When the CAW’s Auto Policy initiative was first floated back in April, The Globe and Mail dubbed it “retrograde“, and some of its tenets, like devaluing Canada’s currency, seem totally implausible to the point where it’s difficult to take the proposal seriously. At best, it’s merely a distraction from the lack of meaningful gains with Chrysler in the areas of product and investment. At worst, it’s a foolish idea with little grounding in reality that will only serve to expedite the process of sending jobs abroad.

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13 Comments on “CAW Workers Ratify Chrysler Agreement As The Countdown To 2016 Begins...”

  • avatar

    The current Federal government will not support the CAW wish for a suspension of Free Trade Talks with Korea or Japan, this Government is all for Trade everywhere and they won’t devalue the Canadian Dollar either imho!

  • avatar

    Devalue the Canadian dollar? How about the US work on valuing theirs?

  • avatar

    Look, a srong currency is an effect you have to deal with when you country becomes a major energy/commodities producer. All the oil and gas production is (in addition to bringing in wealth and jobs) pushing up the Canadian dollar and hurting exporters/manufacturers competitiveness.

    I wouldn’t be surprised if the production of at least one Chrysler/Jeep/Dodge vehicle started in Italy for global export. Chrysler sales are growing and with the new slew of products (next 200, 100, crossover, etc) it is likely to continue.

  • avatar

    Does the CAW really think that Canada will drop everything to save its (unionized) auto industry? #ridiculous

  • avatar

    I do see production moving to Italy. Fiat sold the Italy-made Tipo down here in Brazil in mid-1990’s and charged lower prices than was being asked for a few brazilian-produced competitors then. It sold like hotcakes, btw.

    And they are not afraid of doing out-of-free-trading-zone deals, either: as we speak, Argentina is starting to see the italian-produced Fiat Bravo hit their streets. The same car is produced in Brazil, a country with which Argentina shares the Mercosul free trading agreement.

    So I wouldn’t be shocked to see italian Chrysler 300s hitting american streets. Judging by current stereotypes the 300 is already a Mafia favorite – being a paesano might just add to it.

    • 0 avatar

      Fiat doesn’t even make the NA market 500 in Italy, why would Chrysler make the LX cars (which the majority by far are sold in NA) in Italy (no cost savings, union labor there too) then float most of them over here? Spite? It doesn’t add up.

      • 0 avatar

        Good point. I still think Marchione will build smaller Jeeps (or Jeep branded 4WD Fiats, like the Panda) in Italy for export everywhere BUT North/South America.

      • 0 avatar

        Fiat makes the US-market 500 in Mexico. The european version is assembled in Poland, not Italy.

        The thing is, five years ago Fiat was doing great in Europe with the then-recent Grande Punto. The Panda was a hit as well, and most of its models were selling in decent numbers. Italian production was not outstanding but neither it was an issue – there were no talks of overcapacity altogheter.

        Now it’s a whole other scenario, and they really need to keep those italian plants working. Let’s not forget the political ambitions of a certain Mr. Montezemolo. Once Poland and Turkey plants were greatly used for exports; not Fiat needs to move production back to its homeland.

        I still think Mexico is the natural choice for the LX cars. Or maybe even Brazil. What I pointed out is that italian production must not be ruled out as possibility. Even because there’s a new LX generation coming up, and it will spawn a new Alfa Romeo flagship and a baby Maserati.

  • avatar
    Gardiner Westbound

    The Detroit-3 Canadian workforce has fallen from 70,000 to less than 21,000 in 30 years. Bludgeoning the automakers into accepting unaffordable contracts is hastening the denouement. Unlike the union bosses, the CEOs are not financial nincompoops. Long term they won’t pay the world’s highest auto assembly wages. Chrysler’s refusal to commit to a third shift at the Brampton plant is a thousand jobs that in all likelihood won’t happen.

    Taxpayers will rebel at the thought of another carmaker bailout. Why should they pay for union foolishness? No taxpayer handouts and the American brands will pack up and leave Canada, probably within 10 years.

    The Japanese carmakers with Canadian plants have to be nervously eying events. They must match CAW wages to keep the barbarians on the far side of the gates. Nor are European and Asian auto companies clamoring to build new Ontario factories. They too are finding Canada unaffordable.

  • avatar
    dash riprock

    First of all devaluing a currency is not as easy as some politicians believe. In the past one of the levers used was to increase/decrease interest rates. With rates within 50 basis points of all time low, the bank of Canada has little room to move.

    When the cdn dollar was as low as 62 cents to the us dollar, the CAW used this advantage to negotiate a very rich series of contracts, richer than the UAW contracts. This $ advantage could have seen the number of employees in the canadian auto sector greatly increase. Instead the CAW traded increased jobs for increased pay and benefits. Their priviledge to do so, no argument. But now times have changed, my tax dollars have been used to maintain these CAW jobs, now there should be some concern on the CAW part to the sacrifice us taxpayers have made. But true to form, the CAW is only looking to maximize their benefit and to hell with all others.

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