Canadian auto union won't reopen GM contract

Tue Mar 31, 2009 6:00pm EDT
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By John McCrank

TORONTO (Reuters) - The Canadian Auto Workers union said on Tuesday it will not reopen its recent concession agreement with General Motors of Canada, but it would be willing to look at alternative measures to help reduce the burden of the company's so called "legacy costs".

The union's statement comes a day after the Canadian and U.S. governments rejected viability plans presented by GM and Chrysler, with Ottawa suggesting that General Motors and the CAW should reopen recent bargaining talks.

The CAW and GM reach a new contract agreement on March 11, aimed at cutting the struggling automaker's costs and making it eligible for long-term government aid.

The deal took nearly C$1 billion ($790 million) in legacy, or retiree, costs permanently off GM's books through the elimination of inflation-based retiree benefit increases, transferring active employee bonuses to cover retiree healthcare costs, as well as other measures, the company said.

GM said those lower costs would come on top of savings of more than C$7 an hour on its active labor costs.

In saying it would not revisit contract negotiations with General Motors, the CAW pointed out the deal was reached ahead of a March 31 deadline that had been imposed by Canada and the United States for GM and Chrysler to present their viability plans, needed to qualify for long-term government aid.

"The UAW didn't get their deals done by March 31. Chrysler didn't get a deal done with Fiat by March 31. They didn't get deals with their bond holders by March 31. I don't think they got final deals with their dealerships by March 31," said Jim Stanford, the CAW's economist.

"We got a deal done before March 31 and then on March 30, they say, sorry, you've got to do it again. So it becomes a farce after a while and we've not heard any specific arguments about what is wrong with the deal."   Continued...

<p>A General Motors logo is seen at a car dealership in Toronto December 12, 2008. REUTERS/Mike Cassese</p>