I considered the other day the argument of Chrysler and Ford and Canadian governments that the CAW members must agree to cut their pay to that earned by non-union autoworkers. I opined on what a curious and unprecedented little argument that is, and referred to the piece by CAW economist Jim Stanford that described some of the numbers involved in that argument. Thomas Walkom has a nice related piece in the Star today that explains the origins of Chrysler’s ubiquitous claim that it pays its unionized workers $76 per hour. Walkom explains that in fact the top rate earned by a CAW member at Chrysler is $34 per hour, just about $5 above what a non-union Toyota worker earns.
However, Chrysler includes the total cost of labour in its figure, a large part of which is the cost it owes people who don’t even work for them anymore–retirees. The money owed to retired workers is called ‘legacy costs’, and Chrysler says it doesn’t have the money to pay it. Toyota and Honda don’t have high legacy costs because they are relatively new to Canada. So, in other words, because Chrysler didn’t manage the pension funds effectively, it is now demanding that existing workers take a major pay cut to make up for the difference between the pensions it owes and the money in the pension funds. Keep in mind that Chrysler bargained the pension rates, but now it say it can’t keep its promise.
Who do you think should pay the legacy costs owed by Chrysler? The retirees, current workers, Chrysler, or the government?
