(Adds GM quotes)
MONTREAL (AFP)--The Canadian Auto Workers union reached
agreement Monday with General Motors Corp. (GM) to reduce labor
costs, paving the way for authorities to further fund the ailing
U.S. auto giant.
Some 10,000 CAW members "voted overwhelmingly in favor of a new
collective agreement, ratifying the deal by 86%," the union said in
a statement following the tentative agreement reached with GM on
Friday.
The cost-cutting move, which involves about a $15 to $16 wage
cut per hour, was demanded by Ottawa and the Ontario government as
part of a joint bailout of GM, to try to make the company more
competitive with Japanese and European automakers.
"Although we were forced to make a number of important
sacrifices, the support we received from our members is proof that
they recognize the incredible challenges the industry is facing,"
CAW president Ken Lewenza said.
GM said it "welcomed" the ratification of the new agreement,
praising "the shared sacrifices" of employees and the CAW's
"leadership and professionalism."
"The ratification of the new agreement is a critical step toward
GM Canada's successful restructuring into a stronger, more viable
company," the automaker said.
The company has asked for a loan of CAD3 billion ($2.66 billion)
from the Canadian and Ontario governments, and billions more from
Washington, to keep it afloat as it restructures its North American
operations.
Ottawa had set a May 15 deadline to reach a deal, but the talks
continued until Friday and votes were cast over the weekend.
GM is expected to present Ottawa and Washington with its
restructuring plan by June 1.
The agreement, which also includes major benefits, wages and
pension concessions but keeps plants open in Ontario province, came
days after GM secured a similar cost-cutting deal with its
unionized American workers.
Last month, U.S. automaker Chrysler LLC struck an agreement with
its Canadian employees to trim compensation by CAD19 per month.
But that agreement didn't prevent Chrysler to file for
bankruptcy protection. Many analysts predict a similar scenario for
GM this week.