Magna Announces Signing of Framework of Fairness Agreement with CAW

AURORA, ON, Oct. 15 /PRNewswire - FirstCall/ - Magna International Inc. (TSX: MG.A, NYSE: MGA) today announced the signing of an historic agreement with the Canadian Auto Workers ("CAW") that will usher in a new relationship between the two parties. The Framework of Fairness Agreement ("FFA") is a set of principles which establish the needs of workers and the needs of business to be competitive. The FFA represents a new labour model that aims to preserve the key components of Magna's Fair Enterprise system, while ensuring proper checks and balances.

Frank Stronach, Chairman of Magna's Board of Directors stated: "The traditional, confrontational model of labour relations is unproductive and wastes energy that would be better focused on creating the conditions which would be fair to employees and would ensure that Magna remains competitive in the global automotive industry. Magna recognizes that the CAW has the ability to be an important ally in addressing the many competitive challenges our industry is facing, ensuring the needs of employees and society are balanced against the needs of our other stakeholders, namely customers, investors and other business partners. We are pleased that the CAW is willing to embark with us on this groundbreaking agreement."

The FFA will be introduced to employees in Magna's Canadian manufacturing divisions over a period of several years. Magna divisional employees will have the opportunity to vote on whether to approve a new contract under the terms of the FFA, and join the CAW. If a majority of workers in a facility vote in favour, then that plant will be covered by a new Magna-CAW national collective agreement. Representation by the CAW, the national contract and subsequent changes negotiated to that national contract would be subject to approval through secret-ballot votes in each plant.

The key terms and conditions of the FFA include:

- preservation of Magna's Fair Enterprise culture and operating principles, including the sharing of the company's financial success through equity ownership, as set out in the Magna Corporate Constitution and Employee's Charter;

- comprehensive no strike, no lock-out provisions with unresolved collective bargaining issues being settled through final offer selection arbitration;

- progressive concern resolution and plant representation mechanisms hat preserve Magna's Open Door Process, Fairness Committees, Employee Hotline and Employee Advocates;

- competitive wage and benefit principles consistent with the Magna Employee's Charter;

- a concept tying annual wage adjustments to a manufacturing inflationary index, plant specific performance measures and competitive considerations;

- secret ballot voting on workplace issues;

- depoliticization of the workplace and labour-management relations

"We have been encouraged by the fact that CAW leadership have demonstrated an understanding of the difficulties that manufacturers face in this competitive, global environment" stated Don Walker, Magna's co-Chief Executive Officer. "This agreement will likely give the CAW increased membership and representation within Magna's Canadian divisions, while at the same time allowing us to maintain our competitiveness, through our entrepreneurial and flexible operating philosophy as we continue to work hard to support our customers and win new business."

We are the most diversified automotive supplier in the world. We design, develop and manufacture automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Asia, South America and Africa. Our capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; metal body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; as well as complete vehicle engineering and assembly.

We have approximately 83,000 employees in 229 manufacturing operations and 62 product development and engineering centres in 23 countries.

SOURCE Magna International Inc.

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