American auto workers to get bonuses, but CAW follows a different path.
by Gordon Sova (gordon.sova@thomsonreuters.com)
The United Auto Workers (UAW) will be negotiating shortly with Chrysler, Ford and General Motors in the U.S. and the divergence between the Canadian and American auto unions is clearly evident.
Hourly workers at Ford are reportedly about to receive profit-sharing payments of over $5,000 each. And, according to the Detroit News, the companies are dangling larger bonuses in front of UAW negotiators.
Bonuses are good for the companies because they control fixed costs and are paid only if there is a profit. In the recent round of negotiations, they were established to allow the company to lower wages; now executives are talking about tying them to quality metrics.
One win for the union is that fat bonuses are making membership look more attractive to non-union Southern employees of foreign automakers.
Meanwhile, president Ken Lewenza of the Canadian Auto Workers (CAW) is refusing to follow suit. Canadian workers opened their contracts in 2009 to help their employers out of bankruptcy, but the contracts they arrived at had significant differences. First, they have higher second-tier rates for new employees and higher rates for first-tier employees, and they have no lump sums.
Lewenza is challenging the UAW to attack two-tier wages and is vowing to do so in Canada as well, when his turn comes in 2012. And he is pointing to guaranteed wages, rather than contingent bonuses, as the more responsible way to proceed.
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