CAW Approves GM Pact
News: Some 73% of US automaker General Motors Company's (GM) Canadian workers have approved a new four-year contract with the Canadian Auto Workers (CAW) union. The contract includes creating or maintaining 1,750 jobs and spending US$675mn at GM's Oshawa assembly plant and St.Catharines powertrain plant, as well as a US$3,000 quality and productivity bonus for workers upon ratification and annual cost of living lump-sum payments of US$2,000 for the three years until 2015. The contract also includes protection of current pension benefits for existing workers with investment and employment commitments in all locations. GM's acceptance is the second deal finalised in the Detroit Three pattern bargaining.
BMI View: The CAW previously revealed that strike committees would be formed at Ford of Canada, General Motors of Canada and Chrysler Canada, in response to the early lack of progress in contract negotiations. The three brands saw a drop in their combined sales in Canada for August of 3.9% y-o-y, while sales of imported brands grew 16.5%. For the 8M12 period, their combined market share also dropped to 45% from 48% in the same period of 2011. A historic triple strike would have severely worsened the position of the Detroit three and rippled throughout the industry, despite the strong showing of import brands.