April 1, 2009 / 4:57 PM / 8 years ago

CAW insists GM agreement stand as Canadian pattern

<p>Canadian Auto Workers (CAW) union president Ken Lewenza speaks to the media in Toronto March 30, 2009. REUTERS/Mark Blinch</p>

TORONTO (Reuters) - The head of the Canadian Auto Workers said on Wednesday he still sees a deal struck with General Motors of Canada as the pattern for the sector’s restructuring and said it was “outlandish” to think the union would consider renegotiating with GM.

Earlier this week, Ottawa and the Ontario provincial government said the plans crafted by the Canadian arms of GM and Chrysler had fallen short of what was needed to make the automakers viable and insisted on further cost-cutting measures.

“It is outlandish to imagine that GM and CAW will go back to the bargaining table and do it all over again,” CAW President Ken Lewenza said in a speech in Toronto. “Everyone involved in this process -- the government, the company and the union -- would lose their credibility if that happened.”

The CAW had reached a deal with GM last month that the company said will eliminate nearly C$1 billion ($789 million) of costs related to its retired workers from its books, on top of cutting active labor costs by more than C$7 an hour.

Lewenza insisted that the agreement stand as the “pattern” to be used in talks with the other companies and said he is ready to take it to Ford Motor Co. Ford has not asked for government assistance.

“We won’t close the door to anyone,” he said in his speech. “We will continue to engage with Chrysler and Ford on a new contract. And we will engage with the companies and governments on the legacy issues.”

Legacy costs related to retired workers include pension and health care.

He also said none of the negotiations between the union and the car companies will affect whether GM and Chrysler will ultimately survive.

“We could work for free and it wouldn’t change a thing until people start buying cars again.”

Canada has promised C$4 billion in loans to prop up GM and Chrysler, controlled by Cerberus Capital Management, while they come up with new restructuring plans.

The federal and Ontario governments will provide Chrysler with C$1 billion, advancing C$250 million immediately. They will distribute another C$500 million in early April and the remainder as of May 1. GM is eligible for up to C$3 billion in bridge loans.

But the government said it would not provide any further assistance until the automakers provide viable plans.

Chrysler, for its part, said the pattern set by the GM agreement would fall short of what it would require and threatened to pull its operations out of Canada if the CAW failed to accept further concessions.

($1=$1.27 Canadian)

Additional reporting by Scott Anderson; Editing by Frank McGurty

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