CAW president Buzz Hargrove leaves the stage after addressing the union membership in Toronto on Thursday.

Life after Buzz

GREG KEENAN,  From Friday's Globe and Mail

TORONTO — Buzz Hargrove went out on a high note Thursday, calling the last agreements he will negotiate with the Detroit Three win-win for the unions and the companies. But even as he did so, he expressed strong fears about the future of the auto industry in North America and sketched a grim outlook for his successor.

“I don't think GM, Ford and Chrysler can survive in North America,” the Canadian Auto Workers president said after outlining tentative agreements reached with General Motors of Canada Ltd. and Chrysler Canada Inc. early Thursday.

“When they're losing market share and losing market share and losing billions of dollars – that can't go on forever,” Mr. Hargrove declared, saying he would not be surprised if one or all of those companies moved their head offices out of the United States.

It was a somewhat wistful union president who wrapped up the last set of talks he will conduct by reaching deals with two companies on the same day, the first time that has happened since the CAW was created in 1985, when then leader Bob White, with Mr. Hargrove at his side, engineered a divorce in Detroit from the United Auto Workers.

Since then, the union has doubled in size to more than 200,000 members and although the actual number of auto workers has been shrinking steadily, the auto talks every three years are intense.

At one point on Wednesday night, for example, as the talks dragged on past a 6 p.m. union-imposed deadline, Mr. Hargrove shuttled back and forth between two downtown Toronto hotels, spending several hours on a critical issue with GM representatives at the Royal York Hotel and then back to negotiate with Chrysler at the Sheraton Centre.

In the end, GM and Chrysler matched an agreement with Ford Motor Co. of Canada Ltd. The deals freeze wages, reduce some labour costs and give the companies more flexibility, but don't eliminate gains workers have made over several years, as the United Auto Workers did in the United States last year.

The 64-year-old Mr. Hargrove described this year's set of talks as the toughest he has faced since he became president in 1992.

He warned in an interview Thursday, however, that they will “look like a picnic” compared with what his successor will face in 2011 if Chrysler, Ford and GM continue to lose market share and are forced to continue slashing their Canadian and U.S. operations.

All three companies are bleeding cash and that is affecting their ability to continue investing in Canada, he said. He pointed to GM, which agreed in this new contract to build transmissions in St. Catharines, Ont., if Ottawa and Ontario come through with financial assistance.

The original transmission announcement was scheduled for February, Mr. Hargrove said, then at one point during the negotiations, GM said it would be announced in June, but now that date has been pulled off the table because of the cash crunch the auto maker is facing.

The slow meltdown of the Detroit Three in Canada was not something Mr. Hargrove could have predicted when he went to work on the assembly line at Chrysler in 1964 after growing up in poverty as one of 10 children in a Bath, N.B., family.

In fact, when he started at Chrysler, the company had five plants in Windsor, Ont., which is where he started his career in the auto industry. Now, Chrysler has one plant in that city.

Thursday, he recalled his worst experience as a union executive coming in 1982, during the battle over concessions to save Chrysler.

Workers shouted and swore at Mr. Hargrove and colleagues as they entered one meeting. Yesterday, Chrysler workers stood up and applauded when he entered a meeting to outline the deal.

The CAW agreements represent “in the face of impossible odds, an incredible victory – more than I would have predicted,” said Sean McAlinden, chief economist and vice-president of research at the Center for Automotive Research in Ann Arbor, Mich. “But if you look out 31/2 years, his successor will not have an easy job.”

The new contracts are “ a short-term agreement, with a short-term horizon,” Mr. McAlinden said. “GM doesn't have the stomach for any more strikes. Ford only cares about getting into next year and Chrysler's people – Cerberus [Capital Management LP] – want to box this company up and get rid of it maybe by the end of the year.”

He sees GM shrinking in Oshawa, Ont., despite commitments the company made to new vehicles there and he points to a grim future for Ford's large Windsor engine plant, which makes V8 and V10 engines for trucks that will not meet fuel economy standards by 2011.