Chrysler Canada labor talks at a standstill

Mon Apr 6, 2009 1:20pm EDT
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By John McCrank

TORONTO (Reuters) - Talks between the Canadian Auto Workers union and Chrysler to strike a cost savings deal at the automaker's operations in Canada are at a standstill, likely because Chrysler is focusing on reaching a partnership deal with Italy's Fiat SpA, the union said on Monday.

Ken Lewenza, president of the CAW, said he kept his bargaining staff on call all weekend on the assumption that Chrysler would want to get back to the bargaining table. The two sides have been working on an agreement that would allow Chrysler to produce a plan that would satisfy Canadian government demands that it prove it can be a viable company.

The government has set an the end-of-April deadline for Chrysler Canada to come up with such a plan, which would qualify it for billions of dollars in long-term government loans.

The CAW said it came "within inches" of a deal with Chrysler a little over a week ago, but the two sides were unable to reach a final agreement.

A Chrysler spokeswoman said on Monday she could not immediately comment on the situation.

"Nobody has contacted us yet in Canada," Lewenza said, adding that there have been no discussions in four or five days. "So I'm assuming there is stuff going on in the United States that I'm not aware of, including the Fiat merger, obviously."

An alliance between Chrysler, controlled by Cerberus Capital Management LP, and Fiat, is essential to Chrysler's future, Washington and Ottawa said last week.

The companies said on March 30 they had reached a framework agreement on an alliance.   Continued...

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