CAW Reaches Agreement for Three-Year ‘Master Economics’ Contract Offer With Ford

By David Friend, THE CANADIAN PRESS

TORONTO – Canadian Autoworkers president Buzz Hargrove says the union and Ford (NYSE:F) have reached an agreement on a tentative three-year “master economics” contract offer.

The master contract will serve as the “centrepiece” for collective bargaining which is aimed at reaching a tentative agreement between Canada’s largest private-sector union and Ford of Canada, one of three major automakers that negotiate with the CAW.

Hargrove said the agreement freezes wages and cuts vacation pay, but avoids changes to workers’ base wages.

It also prevents a two-tier wage system where new Ford employees would be paid about half the hourly wages of older employees.

However, new hires start work at 70 per cent of the top wage, reaching the maximum three years later, he said.

Cost of living arrangements will also be frozen for the remainder of the current contract, and the first year of the new contract, before resuming under the existing plan in December 2009.

Increases to pension payments will be indexed by inflation for second and third years of the new plan.

Also, workers will receive a “productivity and quality” bonus payment of $2,200, once the agreement is ratified.

In lieu of losing 40 hours of vacation pay every year, union members will get a $3,500 cash payment in January 2009.

The union reached the deal nearly five months before the September deadline.

“We believe the fact that we are able to sit down and do this in the environment we did and still have an excellent relationship with Ford Motor Co. best positions us for the investments decisions that will be made in our facilities over the next three years,” Hargrove said in a media conference.

As part of the agreement, the union has given a one-year stay of execution for the Ford plant in St. Thomas, Ont., which was scheduled to close in 2010.

But Hargrove was careful to note that the union can’t guarantee that they’ll be able to keep the plant open past the deadline.

“If we keep losing market share there’s no guarantees,” he said. “We’re going to work like hell to get a new investment and a new product in that facility before this one exhausts itself in September 2011.”