Chrysler and Fiat Reach an Agreement with Canadian Auto Workers

A tentative agreement between Chrysler LLC, the Fiat Group and the Canadian Auto Workers (CAW) on a new labor contract intended to cut costs by CD$240 million per year was reached late Friday night. Though far from complete, the new deal with CAW helps Chrysler LLC move closer to a partnership with Fiat and avoid bankruptcy. Under the new tentative agreement, Chrysler LLC would leave hourly base pay intact but cut a series of benefits.

Aside from the cost-saving provisions that were part of the contract negotiated with General Motors Canada in early March, CAW had to make additional 'sacrifices' including the elimination of semi-private hospital coverage, an increase in the waiting period for sickness and accident benefits, the eradication of employee car purchase and tuition rebate programs and a $3,500 vacation buyout.

"We are extremely grateful to the CAW leadership and to its hard-working members for their openness in this challenging environment to create a new strategy that will lead this company on a path to success," said in a statement Tom LaSorda, Vice Chairman and President of Chrysler LLC.

Al Iacobell, Chrysler's Chief Bargainer and Vice President – Employee Relations, said "The forthright discussions and final decisions made by the CAW not only benefit the Canadian represented employees, but help to ensure the Company's future competitiveness. The tentative agreement also helps move the Company one step closer to a partnership with Fiat SpA."

On the behalf of CAW, President Ken Lewenza issued this statement: "CAW members supported their union right through this process, rather than allowing themselves to be intimidated by crude threats. That has allowed us to bargain the very best agreement possible, imposing the minimum possible sacrifice on our members and their families, despite the incredibly tough times."