OTTAWA, Sept. 17 (UPI) -- Canadian auto workers could strike all three U.S. auto companies as of midnight, the president of the Canadian Auto Workers union has warned.
Union President Ken Lewenza said progress had been made in contract talks with Ford Motor Co. and that the union would focus on completing a deal with Ford before the 11:50 p.m. deadline on Monday.
But The New York Times reported that the union has turned down a two-tier wage system which automakers are using in the United States as a means of lowering labor costs without angering established workers.
New hires have to work toward a full wage in Canada, but after time they are paid the same wages as established workers.
The union has offered to extend the time new hires need to work before they reach a full wage. The union has not, however, conceded the two-tier wage as a permanent strategy for compensation.
Paying new and established workers differently is "not just a philosophical problem. I think it creates morale problems. I think it creates productivity problems," Lewenza said.
A strike, on the other hand, could put a costly jolt in manufacturing growth in Canada, an economist said.
Economist Mark Hopkins at Moody's Analytics said that the automobile industry was responsible for three quarters of the growth in the country's manufacturing sector from June 2011 to June 2012, which means a strike that halts production -- one exception being a General Motors plant that operates under a separate contract -- would give the country's economic growth a costly jolt.
"Stalling this momentum, even temporarily, would be costly," Hopkins wrote in a research note.
Tensions are on the high side, however, as Chrysler Chief Executive Officer Sergio Marchionne threatened to pull out of Canada if costs could not be contained. "We have other plants, other options," he said, a remark that was not well received given the Canadian government's recent help in bailing out the company.
GM has also said lowering costs was a must. "We are focused on working with our C.A.W. partners to reach an agreement that will improve GM Canada's competitive position for the future, which is imperative in today's global marketplace," the company said in a statement.