As Unifor moves ahead in its contract negotiations with the Detroit Three, the union said part of the conversation will be around the automakers’ pension structure.
The Canadian auto union announced on Tuesday it will target General Motors to set the bargaining pattern for the auto industry in Canada, just two weeks before its four-year contract with General Motors, Ford Motor Company and Fiat Chrysler Automobile is set to expire on Sept. 19.
The union isn’t able to discuss any details of the issues under negotiation but Corey Vermey, national representative for the pension and benefits department at Unifor, says one of the issues covered will be pension structure.
Pensions were a part of the last bargaining process in 2012, when a hybrid plan was introduced for all Canadian new hires at the Detroit Three. “It’s one side [defined benefit] and one side [defined contribution],” says Vermey. “The principles when it was designed were to have one half of the benefit at retirement driven by a DC structure and the other half by a DB structure. It’s the classic compromise – they didn’t cut the baby in half, they glued the babies together.”
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Vermey also notes that the Detroit Three’s U.S and global operations have a defined contribution pension in place for employees and it wouldn’t be a “surprise that they might come to Canadian operations with a similar appetite.”
In a newsletter to union members in May, Unifor said it expects to have difficulty with General Motors as it looks to secure language that protects pensions in the future, but the union couldn’t comment further.
Another potential issue in the bargaining is the Auto Sector Retiree Health Care Trust, which was agreed on in 2009 and became operational in 2011. The trust includes General Motors and Fiat Chrysler while Ford is still accruing liabilities for its retirees, according to Vermey.
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