By ALISTAIR MACDONALD And EVELYN JUAN
The Canadian Auto Workers union said Sunday that it will focus on its contract negotiations with Ford Motor Co., in a late breakthrough in talks with the three Detroit auto makers that reduces the threat of the auto workers' first strike in 15 years.
The union has been in preliminary talks with General Motors Co., Ford and Chrysler Group LLC. All parties still face a deadline of 11:59 p.m. Monday to reach or be near an agreement, or the union says its 21,000 members employed by the Detroit auto makers will walk out.
Typically, an auto union will focus on talks with one auto maker and use any contract agreement as a template for further industry negotiations. That target company will be Ford, and CAW leader Ken Lewenza said a number of agreements in principle are now in place.
"Right now, we are feeling that we can get a deal," he told reporters in Toronto. Mr. Lewenza added that it took longer than usual to establish a target company in the current negotiations as the sides struggled to compromise.
In talks that could set the future of U.S. auto production in Canada, the CAW is facing off against Detroit's revitalized and profitable auto makers as the companies push for new cost cuts. Some auto executives say that Canada has become the most expensive place in the world to make cars. For instance, base pay for a Ford assembler in Canada is about $34 an hour, compared with $28 an hour in the U.S., the company estimated. Total labor costs, including benefits and pension costs, are $79 an hour, versus $64 an hour in Ford's U.S. plants.
Chrysler said in a written statement that it was "very concerned" by the CAW's decision to focus on Ford, given that Ford has reduced its Canadian footprint. Last year, Ford closed a plant in Ontario that made police cruisers and other vehicles.
Peter Kennedy, a senior CAW negotiator, said the union is further from reaching a deal with Chrysler than with the other two companies.
Ford, in an emailed statement, said it is "confident that, working together, we can find innovative solutions to help build a successful future for our Canadian operations."
The CAW has now suspended high-level talks with GM and Chrysler as it focuses on Ford.
A spokeswoman from GM said the company is still involved in negotiations to improve GM Canada's "competitive position" for the future.http://online.wsj.com/article/SB10000872396390444450004578000603347139838.html
QE3 hit by mortgage processing delays
(Financial Times) -- The Federal Reserve's attempt to push aid into the heart of the US economy is being blunted by banks struggling to process mortgage applications fast enough, keeping rates on home loans elevated, according to the largest lenders.
The Fed announced last week that it would buy mortgage-backed securities in another round of quantitative easing -- nicknamed QE3.
This was partly designed to ease further the cost of mortgages, but bankers say the impact will be limited by a dearth of loan officers with banks reluctant to cut mortgage rates without the staff to process any increase in business.
"In the very near term [QE3] has virtually no transfer mechanism whatsoever to the customer," said one executive at a leading lender, who requested anonymity. "Originators are massively backlogged in terms of origination volumes."http://edition.cnn.com/2012/09/16/business/us-qe3-mortgages/index.html
Why Canada is seeking Investment from China
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