Having successfully worked with the United Auto Works union in developing a new contract in the US, Chrysler CEO Sergio Marchionne is now turing his attention north of the border, as the automaker gets ready to begin negotiations with UAW’s Canadian counterpart, the CAW.

During a recent speech at the Canadian Institute of Chartered Accountants in Toronto, Marchionne declared in reference to the current CAW situation, “you cannot have all things, you cannot have a strong currency, you cannot have an uncompetitive wage rate and then expect Chrysler or all the other carmakers in this country to keep on making cars in this country and be disadvantaged.”

Officially going on the record before negotiations actually begin has become a Marchionne hallmark, as he took a similar stance  in the US and also in Italy with Fiat.

Both the UAW and CAW have repeatedly pushed for a two-tier wage system, something the Chrysler CEO is against, believing it results in entitlement over productivity. “If we’re all in the same boat, then if I’m doing well I will pay you much more than you would have got as a tier one,” he said. “But if we’re in the sewers, don’t expect your role preserved when everyone else is drowning.”

Marchionne has floated the idea of possible incentives or profit sharing, yet he’s also firm on his stance that Canadian production costs for Chrysler vehicles need to be brought in line with those of the US. At present, Canada produces some of the most profitable vehicles in the company portfolio, namely the full-size, rear-drive LX cars in Brampton, Ontario and the Chrysler minivans in Windsor, however for the company to continue investing in Canada, he’s adamant that concessions need to be made.

However, some, including the president of Local 444 in Windsor, Rick Laporte, see Marchionne’s remarks as a threat and are unhappy at his very public commentary on the subject.  I’m a little pissed off,” Laporte told the Windsor Star. “I’m just surprised that he goes to the press and says those kinds of things. I can go out and say a lot of nasty things too, but I choose not to because I prefer to be professional and have those kinds of conversations one-on-one with him.”

[Source: Left Lane News]

In perhaps a case of robbing Peter to pay Paul, head of the Canadian Auto Worker’s Union, Ken Lewenza  has expressed some concern over a tentative new agreement south of the border between the UAW and General Motors.

The problem centers around the fact that in order to meet the new UAW bargaining agreement, part of GM’s production of its small SUVs, the Chevy Equinox and GMC Equinox might be moved from the CAMI plant in Ingersoll, Ontario, down to Spring Hill, Tennessee.

At present, GM hasn’t made any official announcements regarding the move, though an article in Nashville based newspaper, the Tennessean claims the General is seriously considering such a strategy, citing economic officials.

The resulting story was enough to cause concern for the CAW, making the matter more worrisome is the fact that GM has already pulled such a move, shifting production of it’s full-size Chevy Impala sedan, from Oshawa, Ontario, to the Hamtramck plant on the outskirts of Detroit, something Lewenza says he also first heard about through the newspapers.

As regarding the Tennessee rumors, during an interview with trade publication Automotive News, Lewenza said “where there’s smoke, there’s usually fire.”

[Source: Left Lane News]

The Canadian Auto Workers union, after burning the letter written by Chrysler CEO Bob Nardelli and joint-president Tom Lasorda, has now responded with its own statement.

CAW president Ken Lewenza denies that a $19 labor gap exists between Canadian and U.S. workers and refuses to re-negotiate a contract that has already been re-neogotiated. 

Lewenza calls the $76 per hour wage “inflated and artificial” and says that it, “includes many non-relevant factors, such as expenses associated with retirees who have not worked at Chrysler for years, and payroll taxes which are paid to government not to workers.” He continues: “Perhaps most galling of all, Chrysler’s number even includes the proportional cost of downtime and lay-offs. In essence, we are being ‘charged’ for our own unemployment. The best way to reduce that artificial $76 number is to put Chrysler workers back to work: that alone would reduce hourly costs by several dollars per hour.”

Regardless of how you view the statistics, Lewenza makes two other strong points. First, he says that Toyota and Honda (both of which are non-unionized) have made it well-known that they match wages and other benefits with unionized automakers. In other words, the wage that Chrysler employees are making is fair because it’s what the other companies are paying their staff. Second, Lewenza says that the bond holders haven’t had to make any concessions at all.

Unfortunately for Lewenza and the CAW, it doesn’t matter what they say and it seems that if the $19 gap isn’t closed then Fiat won’t partner with Chrysler, the federal governments in both Canada and the United States won’t keep the cash flowing. As a result Chrysler will be forced into bankruptcy, something Lewenza calls, “an increasingly likely prospect.”

Read the full letter after the jump:

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