As General Motors had recently entered a tentative agreement with the Canadian Auto Workers, the pressure is now on Chrysler LLC to also ink a contract deal with the union or risk a strike. Chrysler is now the only automaker of the Detroit Three that doesn’t have a new labor agreement in Canada. GM and the union were in negotiations for several hours but finally, they reached a four-year deal. Meanwhile, the talks between Chrysler and the CAW are ongoing. Ford Motor Co. and the union had signed a deal last Monday that will be brought before its members for a ratification vote in the weekend. GM and Ford have both agreed to add or retain hundreds of manufacturing jobs in Canada, something that the union considers to be a key priority.
Tony Faria, a University of Windsor professor and auto industry expert, said that the CAW “may be willing” to give 24 hours to Chrysler to get to “pretty much the exact same deal" that was reached with GM and Ford. Faria said that the union would then give a 24-hour warning before pulling out its workers. Chrysler has been the most stubborn among Ford and GM about the labor costs in Canada.
CEO Sergio Marchionne is insistent that these costs must drop to match those of the UAW in the U.S. The Detroit Three considers Canada to be the most expensive country to assemble vehicles. Marchionne has made threats that if labor costs aren’t dropped, he will transfer production out of Canada. Faria said that Chrysler will eventually need to accept the "pattern" agreement set at Ford and agreed to by GM or else, it will be facing a strike that would stop the output of some of its major products.