Canadian union strikes tentative Chrysler deal
By John McCrank
TORONTO (Reuters) - The Canadian Auto Workers union and Chrysler Canada reached a tentative concession deal on Friday that would cut about C$19 ($15.70) an hour from labor costs in a bid to keep the struggling automaker from bankruptcy.
CAW president Ken Lewenza said the deal, if ratified, would save the company about C$240 million annually from cuts in benefits, time off, "legacy costs" and improved productivity, but not through lower base wages or reduced pensions.
"In our judgment we have done our job," he said. "We have met the cost target not just by tightening our belts but by boosting productivity."
The union said the cuts were demanded by the company's potential strategic partner Fiat SpA, which said it would not consider aligning itself with Chrysler otherwise.
A partnership with the Italian car maker was one of the conditions put to Chrysler by the governments in Canada and the United States in order for it to receive billions of dollars in government loans needed to keep it running.
The company has until Thursday to complete deals with all its stakeholders and win government approval of its viability plan, or it will not receive the funding.
"The tentative agreement... helps move the company one step closer to a partnership with Fiat," said Al Iacobelli, Chrysler's chief bargainer and vice president of employee relations, in a statement.
Chrysler had warned the union that if it were forced to file for bankruptcy protection with no CAW agreement in place it would liquidate its Canadian operations, Lewenza told reporters. Continued...