Canadian Auto Workers national union President Ken Lewenza, who steps down this month after an historic merger with another union giving rise to the labor conglomerate Unifor, sees a secure future for light-vehicle production in the country.
However, absent a sound public policy, he warns of a return to the uncertain days of the global economic crisis.
“If government does not have an active industrial policy and an active sectorial policy, namely in the auto industry comparable to what other countries are doing, the next crash could be even worse,” Lewenza says.
He will not seek office when Unifor, which combines the CAW with the Communications, Energy and Paperworkers union into a powerhouse bargaining group of nearly 300,000 members, hosts its founding convention Labor Day weekend.
Although the straight-talking Lewenza will remain with Unifor through September, the convention will mark the end of a 41-year career that has seen many pivotal events in the history of the North American auto industry.
They include the separation of the CAW from the United Auto Workers union in 1985, five rounds of Detroit Three bargaining as an executive council member and the broadest-ever restructuring of the industry just months after taking over the union’s presidency from Buzz Hargrove in 2008.
“He’s done a pretty remarkable job and rebuilt a connection with the rank-and-file,” says Charlotte Yates, dean of the social sciences faculty and a professor in the School of Labor Studies & Department of Political Science at McMaster University in Hamilton, ON, Canada.
Lewenza took the helm of the 200,000-member CAW on the eve of the global economic crisis and after the union had lost tens of thousands of members to a decade of downsizing in the region by Detroit auto makers.
Today, major automotive-manufacturing jobs represent just 13% of CAW membership, reflecting a global trend away from organized labor in the sector.
Unifor strengthens the CAW, Yates says, by uniting union workers in Eastern and Western Canada and giving labor a national voice at a time of hostile government relations.
“Unifor is his greatest accomplishment,” she says of Lewenza. “It reflects his vision around a new direction for the union, and positions it very well.”
However, tomorrow’s Canadian auto industry must have a strong advocate in Ottawa (the seat of government), Lewenza argues.
A renewal earlier this year of Canada’s 5-year-old Automotive Innovation Fund will pump another C$250 million ($238 million) into the kitty, meant to lure auto maker investment and create jobs.
Companies such as Ford, Toyota and parts-supplier Magna have taken advantage of the matching funds, creating some C$1.6 billion ($1.5 billion) of industry investment since the fund began.
But auto maker investment comes and goes, Lewenza says. Canadian light-vehicle output continues to dwindle as the loonie has gained strength against the dollar, making vehicle manufacturing more costly in the country than a decade ago.
Last year, auto makers in Canada built 2.5 million cars and trucks, down 5.6% from 2.6 million in 2002, according to WardsAuto data. Detroit Three production in the period shrunk 22.1% to 1.5 million units in 2012 from 2.0 million in 2002.
At one point in the 1990s, Canada was the No.5 vehicle producer globally. Last year, it ranked ninth. The country’s auto-assembly and parts-making sectors, which rank second in export output after Canada’s booming oil and gas industry, have lost 40,000 jobs over the past 10 years.
Lewenza says the industry needs easier access to government funds and Canadian lawmakers must stop picking winners and losers.
“All we ask the federal government to do is be consistent with capital investment, be consistent with research and development investment, and don’t be so ad-hoc about it,” Lewenza tells WardsAuto in an interview.
At the same time, a looser policy in the U.S. puts Canada at a disadvantage. Across the border, individual states compete to win investment by offering juicy incentives and low-cost labor. But that’s the nature of the game today, Lewenza admits.
“Government intervention into key sectors of the economy is the key to future (auto maker) investment,” he says. “Those are the cards that are on the table today. If you’re not playing them, and playing them aggressively, then you have a problem.”
Looking back at the CAW’s response to the auto crisis of 2008 and 2009, Lewenza says he is satisfied with measures taken by his organization and the Canadian and Ontario governments, but only in the context of the alternatives that existed.
The CAW’s 24,000 Detroit Three employees agreed five years ago to such items as a wage freeze and elimination of holiday bonuses to help the auto makers recover. The union’s 49,000 retirees gave up pension investments from General Motors and Chrysler, agreed to changes in benefit plans and to the creation of a health-care trust run by the union.
Canadian taxpayers, meanwhile, sent C$10.8 billion ($10.3 billion) to GM and C$2.9 billion ($2.8 billion) to Chrysler. Chrysler repaid its loan, and the governments still hold 9% of GM with no immediate plans to divest their shares.
“We did minimize the pain on our members, but the reality is we had a gun pointed at our heads,” Lewenza says. “I could have told them all to go to hell, but that would have been as irresponsible as one gets. In terms of the auto industry, I’m relatively comfortable how we got through the period.”
Lewenza’s bargaining team was able to regain some of those concessions during the 2012 contract negotiations with GM, Ford and Chrysler. The union also preserved its longtime strategy of pattern bargaining with the new contracts, and maintained its position of persuing wage hikes instead of profit-sharing incentives favored by the Detroit Three in its negotiations with the UAW.
“Profit sharing was just a term in the U.S. for almost a decade because there was no return, but if profit sharing became a consistent payment, then we would have to look differently at our compensation.”
Lewenza says he is confident the Detroit Three assembly plants in Ontario will survive the next round of bargaining in 2016 because each has made quality and productivity improvements in recent years.
“I’m feeling comfortable,” he says. “But if you (had) asked me in 2007, I would have said yes, too. But the global financial crisis hit and threw us for a loop. The world changed. So I feel comfortable today, but I will not ever feel comfortable about the security of the auto industry in Canada without consistent, sound public-policy measures.”
As the CAW folds into Unifor, Lewenza says union executives will continue their organizing efforts at Toyota and Honda facilities in the province, which would boost the CAW’s automotive membership roll by some 11,000 workers.
The Japanese auto makers historically have been quick to match wage hikes the CAW wins in Detroit Three bargaining, and the organizing momentum the union gained after evading attempts by GM, Ford and Chrysler to install a permanent 2-tier wage scale in 2012 contract talks appears to be waning, he says
“We’re on the ground, but we’re not in a position to suggest we’re close to victory,” Lewenza says. “But we’ve got a lot of interest. That’s a longer-term project.”
Lewenza spent 15 months plotting the CAW/CEP merger into Unifor. He believes the immediate increase in union membership from about 190,000 to 300,000 workers will give labor a louder voice in Canada and perhaps break down some of the stereotypes with which union membership has been saddled since the auto bailouts.
“Anytime you strengthen union density, you strengthen the objective of good wages and good benefits,” he says. “There wasn’t a lot of sympathy from Americans or Canadians when the auto industry was in crisis. And the reason there wasn’t any sympathy is because there was a perception that auto workers are overpaid.
“When you have a larger organization advancing the objectives of workers in a more focused and concerted effort, and you can bring peoples’ standards up in every sector of the economy, it can’t but help the auto industry.”
The 59-year-old Lewenza, a high-school dropout who landed a job at Chrysler’s Windsor assembly plant in 1972 on a tip from his father, also a Chrysler worker, says he will not seek election to office at Unifor. Integration of the CAW and CEP will take a minimum of six years, and that timetable would overlap too closely the historical retirement deadline of CAW officers.
“The new president should have a longer-term vision than I could possibly have,” he says.
However, Lewenza expects to remain an active, if not official, CAW leader. “I’m going to continue to be a community activist,” he says. “And when the union asks me to do things, I’ll do whatever I can in the interest of our members.”