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CAW makes concessions in GM deal
The Canadian Auto Workers union reached a tentative deal with General Motors of Canada Ltd. today on major concessions that will help the reeling automaker qualify for critical government aid.
More than 10,000 workers will be eligible to vote on the deal - which involves cuts in pay, benefits and time off the job - at meetings Tuesday and Wednesday.
Union negotiators said they expect workers to accept the deal that would slash labour costs significantly and make the company more viable in its request for more than $6 billion in aid from the federal and Ontario governments.
"This was difficult for us but absolutely necessary to help GM at this time," said CAW president Ken Lewenza.
Lewenza said the union reached the surprise deal in only a few days because of the quick need to get government aid and lift the cloud of possible bankruptcy from the company so consumers can confidently buy its cars again.
GM's sales crashed by 56 per cent in Canada last month and it lost its title as No.1 auto retailer for the first time since about 1950.
"All eyes must be on the federal and provincial governments now," said Lewenza.
GM said in a brief statement that the deal is another step in its effort to formulate a plan that will make the company viable again here.
"We compliment the CAW for their leadership to share sacrifices in these extremely challenging economic times," the company added.
The deal would extend the current three-year contract by a year to September 2012 and mean a freeze in wages and cost of living allowance; the annual loss of one more week of holidays; a $1,700 bonus and implementation of a $360-a-year premium for health care. They would also have to pay more for health care including dental bills.
Retirees also face a freeze in monthly pensions and cost of living protection and would have to pay a $180 annual premium for health care plus more out-of-pocket expenses for services such as long-term care.
Detroit-based parent GM, which is on the brink of bankruptcy, can only survive with billions of dollars in loans from governments in the U.S. and Canada. In the U.S., GM says it needs up to $30 billion (U.S.) in loans to survive from the American government.
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