UAW Split Could Damage Canadian Economy

At a time when Canada is pleading for investment from the United States, the recent decision by the United Auto Workers of Canada to separate from its American parent union not only could affect the auto industry’s growth here but also endangers the flow of foreign money into the Canadian economy.

The Canadian UAW, led by Robert White, its dynamic and ambitious president, announced last month that it was severing its ties with the UAW of America and would establish itself as an independent union.

White said in an interview that he expects other Canadian unions to break away from U.S.-dominated organizations and ultimately merge into a “nationwide, organic union.”

He already has a name for the organization--The Canadian Metal Workers’ Federation--and is negotiating with other unions, including the Canadian Assn. of Airline Employees, as a first step.

Seeks ‘Umbrella Organization’ “I want to see if we could start working closer together and form something that might grow into an organic union,” White said. Such “an umbrella organization,” he went on, could lead to coordinated bargaining in several industries. Should White achieve this objective, the ramifications would be profound, both in Canada and in the United States, particularly for industries that have integrated their operations in the two countries, and could seriously affect U.S. willingness to meet Prime Minister Brian Mulroney’s plea for heavy new investment.

Furthermore, White, already a political power here, could assume a role unparalleled for a labor leader in North America since the New Deal era, when unions were a crucial part of the Democratic Party’s successes in the United States.

For nearly 50 years, since the birth of the auto industry in Canada, auto workers here were dominated by UAW leaders in Detroit. Their contract goals were set by Americans, their negotiations were often carried out by Americans, and they could not strike without authorization from Detroit.

Even though Canadian membership grew to 120,000, a tenth of total UAW strength, there was only one Canadian on the union’s international executive board of 25 when White walked out Dec. 10. His colleagues had just voted 24-1 against granting the Canadian branch autonomy in running its own affairs.

White’s declaration of independence was centered on the America-first attitude of the UAW leaders in determining how the union would approach negotiations with the auto companies in Canada and the United States.

The Canadian concern was not new but the squabbling over the Detroit headquarters’ insistence that Canadian workers accept goals set in the United States was submerged until 1978, when White took over as president of his branch.

When Chrysler Corp. asked for union concessions in 1979, to support its request for giant loan guarantees from Congress, White publicly and strongly objected.

“I said no political system outside Canada is going to dictate terms to Canadian unions,” he recalled recently. “The broader issue was workers being governed by, and their ability to respond to, their own political system.”

He swallowed the American UAW dictates then, but in 1982, when Chrysler demanded more concessions, White objected to the international leadership’s decision to go along, and he led the Canadians out on a five-week strike.

Again last year he rebelled against Detroit’s order that he follow the American lead in talks with General Motors Corp. and reduce demands for large pay increases in return for strengthened job security and on-the-job benefits.

White argued that his workers were already far behind their American counterparts, receiving about $7.50 an hour less because of exchange rates, and it made no sense to follow Detroit’s strategy in Canada.

After Owen F. Bieber, the international UAW president, tried to force White to follow his lead, and when White learned that Detroit union officials were advising GM negotiators to hold the line against the Canadian negotiators, White called a strike, one that lasted 13 days and closed down several U.S. plants because the supply of parts produced north of the border dried up.

In the end, White and GM settled on terms that gave Canadian workers a considerably higher pay raise than the Americans received in their talks and gave White both the ammunition and the support he needed to pull out of the UAW.

“Our leaving was not made in anger and is part of a natural evolution; it is taking responsibility for your own destiny and that is absolutely important,” White said.

Besides, he and UAW officials in Detroit say they are negotiating in a friendly way the details of the split, including how much of the parent union’s $583-million defense fund should go to White’s group.

But if there is no animosity between the unions, there certainly is suspicion of White’s motives and ambitions, both among other Canadian labor leaders and industry officials. For example, the United Steelworkers in Canada said it has no interest in either breaking away from the American-based international union or in joining White’s projected Metal Workers’ Federation.

Further, some of Canada’s largest unions are in service industries and civil service, and none of these non-industrial groups has shown any enthusiasm for White or his plan.

The wariness of the auto industry is plain to see. Canadian plants produce all the Ford V-6 engines and 5.8-liter V-8s. And Chrysler makes all its popular minivans and full-sized vans in Canada, as well as large quantities of trim and pistons. A separate Canadian union with a readiness to strike poses obvious dangers to the companies, something made painfully clear to GM last month when White’s strike forced the company to lay off 13% of its 380,000 American hourly workers because there were no parts for them to use.

White is gambling that the wage differential will keep the auto companies in Canada and even increase their investment, as well as attract auto makers from other countries.

However, Thomas W. Miner, Chrysler’s vice president for labor relations, told reporters recently that Canada “holds the lifeline of the company,” and added: “We have to consider whether we want to be in that position.”

Canada GM President John F. Smith Jr. said that “future investment decisions must now take into account the change in the Canadian labor environment, including the potential impact of a labor action in Canada on production throughout North America.”

A GM official in the United States, Alfred Warren, told MacLean’s magazine, “We cannot afford to be held hostage by any union outside the United States.”

Because the 1965 U.S.-Canada auto pact requires the manufacturers to produce large numbers of cars and spare parts in both countries, they cannot pull out of Canada without facing renewed tariffs on cars sold here, but the Big Three auto firms are producing well over the required amounts and could cause damage merely by pulling back their excess.

What is particularly worrisome to Prime Minister Mulroney’s government would be a decision by the Americans not to increase--and accelerate--their investment, for he is counting on such investment to fight his country’s stagnating economy and nearly 12% unemployment.

“That alone in the auto industry would be a serious problem,” a Canadian official said, asking not to be identified by name. “But it would be disastrous if White’s attitude spread among other unions and led foreign investors to shy away because of doubts over our labor stability.”

And there are strong signs that White is influencing other industrial unions, even some leaders of the otherwise cautious steelworkers’ union. Some in the steelworkers’ union expressed anger last year when the international went along with a plan to set import quotas on steel products to the United States, a step that would have cost 2,000 Canadian jobs.

Canada was ultimately exempted from the quotas, but Cecil Taylor, president of Steelworkers’ Local 1005 in Hamilton, supported White anyway, saying: “This is fantastic. I have been waiting for this for 20 years.”

White was also endorsed by the president of the 2-million-member Canadian Labor Congress and officials of the 40,000-member Confederation of Canadian Unions.

White says that while mergers of various Canadian unions “are inevitable, it may take 15 years” before a nationwide industrial union can be formed, but the steps he has taken and the prospect of one huge labor federation is serious and has already reshaped Canada’s labor movement.

It also may reshape labor’s role in Canada’s politics. Organized labor is already affiliated officially with the mildly socialist New Democratic Party, which has 30 members in Parliament and is challenging the once-powerful Liberal Party as the official opposition to Mulroney’s governing Progressive Conservative Party.

If the New Democrats can move past the Liberals--and many polls and political experts indicate that it is likely to do so--White, as head of a large and powerful union movement, would be in a position of extraordinary power.

“It would be like the union movement in the 1930s and ‘40s in the United States,” a foreign diplomat said. “(President Franklin D.) Roosevelt and the Democrats in Congress had to give union leaders a great deal to get what they wanted in terms of support. That could happen here.”