CAW makes concessions to Detroit 3 on wages and pensions for new employees image

The Canadian Auto Workers has taken a step back in negotiations with the Detroit 3 carmakers by accepting changes in wages and pensions for new hires.

CAW National Secretary-Treasurer Peter Kennedy said the union has proposed a lower starting wage for new hires and a longer “earn-in”, the time it takes to reach the highest salary. However, new workers would still eventually reach the same level of pay as existing employees.

“The important thing is that over time they would grow into the prevailing rate, so that we wouldn’t have a permanent two-tier system,” Kennedy was quoted as saying by Reuters. He didn’t offer further details and refused to comment on the rumor that it might be possible to extend the earn-in from the current six years to as long as 10 years.

Kennedy said the union has also proposed a new pension scheme for new hires, with new workers to contribute to their pensions (current employees don’t) and still be entitled to a defined benefit, not a defined contribution pension. Also, CAW could relax the “30-and-out” provision for new hires, allowing employees to retire after 30 years only if they were above a particular age.

CAW is under pressure to reach a contract deal ahead of a strike deadline on September 17 at 11:59 p.m.