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He said the UAW has recognized this and was able to reach a fairly generous labour agreement with the Detroit Three last year. The CAW will play an important role in winning additional investment, too. While the union members might not be open to giving up annual wage or cost of living increases, they may have little choice, he said.

But Mr. Lewenza said all the talk of the added costs of producing in Canada versus the U.S. is just “shadow boxing” ahead of the main event.

Jim Stanford, CAW chief economist, said the cost disadvantage of producing in Canada is a bit of “a wash.” He said the CAW was in the ballpark when it comes to cost, but the parity of the Canadian loonie was making it look more expensive than it is. He said the union believes the currency is 20% overvalued, and will fall eventually.

But he also pointed to the additional investments Toyota and Honda have made in Canada in recent years as evidence that it doesn’t cost too much to produce in Canada.

In the literature Honda sends out whenever the CAW tries to organize its Canadian labour force, the Japanese automaker claims its workers pay and benefits are on par with those of the Detroit Three. At the same time, Canadian workers provide other benefits, including productivity, that other jurisdictions do not, the union argues.

“They’re not going to shut everything down and move it for a 5% cost differential. No way,” Mr. Stanford said. “The question is in an environment of an overvalued dollar what, if anything, can we do to product our share of investment going forward? That’s the challenge.”

Sergio Marchionne, Chrysler’s chief executive, said this week on a conference call his company would be approaching the talks with the best of intentions.

“We’ll see whether we can get a solution on the table that makes sense given the economic environment and the differences between Canada and the United States on manufacturing costs,” he said. “We’re all aware of the issues, we need to find an intelligent way of getting out of it and moving on.”