Time may be running out fast at Chrysler Canada:
Chrysler already working to pull out of Canada
Sources familiar with Chrysler’s plans say the automaker has already begun work behind the scenes to pull its operations out of Canada if it can’t reach an agreement with the Canadian Auto Workers by the end of the month.
Chrysler Canada has said it needs to cut its labour costs by approximately $20 an hour to be competitive with foreign automakers such as Toyota.
Currently, the company estimates its all-in hourly labour costs — which include wages, benefits and legacy costs such as pensions — to be approximately $76. To be competitive with Toyota plants operating in Canada, it says it needs to reduce those costs to $57 an hour.
Chrysler president Tom LaSorda told a parliamentary committee last week that the company may not be able to continue operating in Canada if it can’t reduce its labour costs enough to be competitive.
A source familiar with Chrysler’s labour objectives said the company has already started considering “alternative locations with more competitive cost structures” for its Canadian operations, which include employ about 10,000 hourly workers [3,000 more than GM Canada soon] at assembly plants in Brampton, Ont., and Windsor, Ont., and a casting plant in Toronto.
CAW president Ken Lewenza has said there is no way the union will give more to Chrysler than it gave to General Motors Canada in negotiations earlier this month.
Chrysler estimates the agreement with GM, which was ratified by CAW members last week, cuts that company’s labour costs by approximately $7 an hour — an amount LaSorda characterized as “unacceptable.”
The source said Chrysler Canada believes it can achieve its cost reduction goals without cutting base wages. Instead, the company will look at cutting benefits such as paid time off, unemployment assistance and overtime premiums…
Update: TODAY’S IDIOCY from Norman Spector:
Harper now is part of the problem (Walkom)
…the most sensible response from Ottawa and Queen’s Park might be to effectively nationalize Chrysler’s Canadian plants as the price for aid. Then they could use these plants to develop a truly modern, green automobile.
No, I don’t have a detailed plan. But I do know – business mythology notwithstanding – that Canada has used crown corporations creatively in the past…
What’s Good for General Motors . . . Would Be a Miracle
Like, er, nationalization?