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CAW Union Goes on Strike at TRW, Shuts Chrysler Minivan Assembly
29 Feb 08
Members of the Canadian Auto Workers union have walked off the job at a TRW plant, at the beginning of what could be a year of serious labour unrest in the country.
Global Insight Perspective | | Significance | The TRW plant affected supplies suspension modules to Chrysler's minivan assembly plant in Windsor, Ontario, which has thus far cancelled two shifts, with more likely to follow. | Implications | The CAW strike is the second in the country in as many weeks as workers seek improvements in wages, suggesting that 2008 could be a turbulent year for Canadian labour relations. | Outlook | The CAW is looking to establish a collective bargaining agreement with a number of suppliers this year. Meanwhile, the union is receiving pressure from its members, who want improved wages and benefits as the local economic conditions worsen. This, combined with the pressure from suppliers and OEMs to reduce costs, means that there is little room for manoeuvre. |
Members of the Canadian Auto Workers (CAW) union have walked off the job at supplier TRW's Windsor, Ontario component plant, according to a report by the Windsor Star. The plant supplies suspension modules to Chrysler LLC's nearby Windsor minivan assembly facility, which manufactures the Dodge Caravan and Chrysler Town & Country minivans, and this ceased operations late last night due to a lack of parts. Chrysler's other minivan assembly plant in St Louis is unaffected. According to Chrysler spokesperson Michele Tinson, the company has cancelled the Friday morning shift, and additional shifts may also be affected. The CAW is negotiating with TRW to organise the plant, which opened approximately 14 months ago and according to sources was expected to be a CAW plant from the beginning. The biggest issue currently is wages and benefits, with average hourly pay at the plant said to be C$11.25 (US$11.50). The union states that the wages are insufficient for the region, with some employees needing to resort to food banks to feed their families. The union has stated that it wants to secure a deal on wages and benefits at least as good as the one it agreed with Magna, including wages of at least C$14 per hour. TRW claims that it is going to attempt to keep the plant running and parts flowing using management on the assembly line, but it has not yet been announced when the plant might restart with replacement workers. CAW Local 444 President Ken Lewenza said that the talks at TRW broke down after union workers failed to receive wage increases from the company, adding that workers were looking to boost pay to US$18 per hour from US$11 per hour. The CAW is attempting to secure its first collective bargaining agreement, which would include TRW, Hella-Behr Plastic Omnium, Dakkota Integrated Systems, and Oakley Assembly. TRW spokesperson John Wilkerson said: "We hope to get back to negotiations as soon as possible." This is the second strike to have hit the U.S. automotive industry in three days. American Axle workers walked off the job on Tuesday (26 February) over wage and benefit issues, leading to the idling of General Motors' (GM) Pontiac truck plant (see United States: 28 February 2008: GM to Idle Pontiac Truck Plant as American Axle Strike Continues). Outlook and Implications This may be just the beginning of the CAW's woes in a year of negotiations for new contracts, but CAW President Buzz Hargrove refuses to compare the TRW situation with that coming up regarding the Detroit “Big Three”. Indeed, Hargrove may be right—the TRW contract is not a renegotiation of an existing agreement, but an initial organising agreement; this is the plant's first collective bargaining agreement, and as such is bound to be somewhat painful, especially given the current economic climate for auto manufacturing in the country. The Canadian dollar has reached parity with the American dollar, erasing any currency exchange benefit. For other CAW contracts, wages have been elevated by automakers and suppliers happy to do so, as the currency and state-run healthcare have still provided for cost benefits. TRW likely opened the plant to be close to Chrysler's minivan assembly with the idea that it could achieve competitive wages; an attempt now to increase those wages and benefits would very likely result in a contract that forces the supplier to begin looking elsewhere for lower-cost assembly opportunities. Chrysler meanwhile maintains an inventory of its new minivans and will not be unduly affected should supply restart soon. However, should the strike drag on, Chrysler could be hurt as the minivan range is one of its big volume providers despite the depressed segment, and the company needs to maintain its cash flow and volume sales with minimum disruption in what is shaping up to be a tough year.
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