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Further to my report last May, we have renewed our fleet insurance with C.G.U. Insurance Company. As expected, our loss ratio in Ontario has forced premium rates higher than the preceding year.

An extensive Request for Proposal process was conducted for the purpose of selecting a leasing company to provide fleet cars for CUPE staff who will be ordering 2003 vehicles. Five companies submitted proposals, and two were selected for extensive interviews. Following discussion and review, a decision was made by CUPE and representatives of CSU to split this years fleet order between two companies. Transportaction Ltd. has been awarded the contract to supply vehicles for staff in Ontario and at National Office, and PHH will provide vehicles for staff in other provinces. The competition between these suppliers should generate positive benefits for CUPE. In addition, negotiations were recently completed with General Motors whereby GM would continue as the primary supplier of vehicles for the CUPE fleet. The very substantial allowances negotiated by
our staff will result in attractive pricing for the 2003 fleet.

We will soon start the ordering process for the 2003 model year.