Canadian Autoworkers agree to outline of Ford contract

TORONTO—Canadian Autoworkers president Buzz Hargrove said Monday his union has agreed to the outline of a tentative three-year contract from Ford Motor Co, a surprise early agreement that could set a pattern for negotiations with the other U.S-based automakers.

Hargrove said the deal freezes wages and cuts vacation pay, but avoids changes to base wages.

It also prevents a two-tier wage system used in the U.S. where new hires would be paid about half the hourly wages of older employees. However, new hires start work at 70 percent of the top wage, reaching the maximum three years later.

The union said it reached the deal, which will cover about 8,000 Canadian auto workers, nearly five months before the September deadline.

Hargrove said Ford's assembly plant near St. Thomas, Ontario, which was scheduled to be closed in 2010, will be kept open another year. But he said the union can't guarantee that they'll be able to keep the plant open past that.

Canada's auto industry long had an advantage over the U.S. industry because Canada has free medicare and the Canadian dollar was weak, but those advantage no longer exist as the dollar is almost at par with the greenback and U.S. auto industry has fewer health care costs because of recent agreements.

Hargrove said the union will be meeting with GM and Chrysler next week.

"We now have the pattern established for the Canadian negotiations with GM, Ford and Chrysler for 2008," Hargrove said.

A call seeking comment from Ford was not immediately returned.

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