Canada says GM-CAW deal a piece of rescue puzzle
By John McCrank
TORONTO (Reuters) - A cost-cutting agreement between General Motors Canada and the Canadian Auto Workers union is just one piece of the puzzle that has to be solved before government rescue money can flow to the carmaker, Industry Minister Tony Clement said on Tuesday.
Union members in Ontario are voting on the tentative deal that would result in savings of several dollars an hour in costs for active workers and "substantial cost reductions" for retirees, the union said. CAW leaders have fully endorsed the agreement.
The results of the vote are expected late Wednesday.
GM is seeking emergency loans of up to C$7 billion ($5.4 billion) from the governments of Canada and the province of Ontario to help it survive the steep plunge in North American auto sales.
Ottawa has said that in order to qualify for the loans that all of GM's stakeholders - from labor to bondholders, to management -- will have to come to the table to help make the company more viable.
Clement reiterated that sentiment after a speech in Toronto.
"Part of the picture is labor cost, part of the picture is how management costs things out in their overhead costs. The other part of the picture is what is your plan to get where we are right now to where we have to be to have a viable auto sector," he told reporters.
"That is to say that this is a piece of the puzzle, but it's not the entire Rubik's Cube." Continued...