Canadian Union Agrees To Sweeping Concessions With GM
08 März 2009 - 6:32PM
Dow Jones News
The Canadian Auto Workers union agreed Sunday to sweeping
concessions with General Motors Corp. (GM), a move that clears the
way for the struggling auto maker secure loans from the Canadian
government.
The CAW was left with few options after GM warned it might cease
operations in Canada without union givebacks. The Canadian
government said it wouldn't consider giving state aid until the
union agreed to concessions.
The new deal freezes wages for active workers and pension
payments for retirees. Workers will get less time off and forgo
cost-of-living pay increases. In addition, retirees for the first
time will make co-payments for health care.
A majority of GM's 10,000 hourly workers in Canada must ratify
the deal. A vote is expected this week.
"There is no joy on our side of the bargaining table," CAW
President Ken Lewenza said Sunday at a news conference. "This is
the furthest thing we wanted to do, but the alternatives are
worse."
The concessions come as GM, subsiding on $13.4 billion in U.S.
government loans, negotiates deeper concessions with the United
Auto Workers in the U.S.
GM has said it needs at least $6 billion in aid from other
governments this year in addition to up to $16.6 billion in
additional aid it's requesting from the U.S. Without the cash, the
auto maker said it could be forced into bankruptcy as soon as this
spring.
The CAW said its deal is contingent on a GM commitment to
continue building vehicles in Canada as well as on the auto maker
receiving the Canadian loans. Canada's auto industry has lost its
competitive edge to U.S. workers represented by United Auto Workers
as the UAW has agreed to concessions that have reduced GM's labor
cost in the U.S. The weakening U.S. dollar also has lowered the
cost of business for GM at home.
"We had to keep pace to make sure there were no reasons to move
work from our plants to the United States," Lewenza said. "This
will cause real hardships to are members and their families."
-By Sharon Terlep, Dow Jones Newswires; (248) 204-5532;
sharon.terlep@dowjones.com