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Canadian Auto Workers Union Setting Themselves Up For Extinction

This week marks the beginning of serious negotiations between the Canadian Autoworkers Union (CAW) and the domestic* manufacturers Ford, GM, and Chrysler-Fiat. Unlike the UAW, which agreed to a series of concessions during the automotive bail-out, the CAW has been able to maintain roughly the same type of rules that the UAW used to have prior to 2009. Specifically:

• CAW workers are all paid the same wage; UAW workers are on a two wage tier system where newer workers make less than older workers
• CAW workers do not have any profit sharing; UAW workers rely upon profit sharing bonuses

These two mechanisms – two tier wages and profit sharing – are essential to the success of the UAW and the automakers they work for. Yet for some reason, the Canadian autoworkers don’t feel that they need to follow the same set of rules that the American autoworkers follow. If the CAW doesn’t concede, the risk is that automakers will simply abandon Canadian production in the next decade or so…and the CAW will cease to exist.

*I say “domestic” only because that’s what these manufacturers are commonly known as. In truth, they build a substantial portion of their vehicles, powertrains, etc. in Mexico.