CAW says Canada issued ultimatum on new GM pact

Thu May 7, 2009 5:34pm EDT
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TORONTO (Reuters) - Canada has warned the Canadian Auto Workers that General Motors would get no government aid and would likely liquidate its operations in the country if the union fails to make more contract concessions, the head of the CAW said on Thursday.

GM, which earlier in the day reported a net loss of $6 billion in the first quarter, faces a May 15 deadline to reach a new deal with the union, CAW President Ken Lewenza said at a press conference.

Senior union members met with representatives of GM and the governments of Canada and the province of Ontario on Wednesday and were told that GM Canada's costs had to come down to the same level as Toyota Canada's.

"If we don't get a deal, and here's the ultimatum, the governments will provide no financial support, and GM Canada will be liquidated," Lewenza said.

If an agreement is reached, GM may qualify for billions of dollars in long-term loans.

Lewenza said government officials also assured the union that the company's Canadian operations would be protected if GM filed for bankruptcy protection in the United States and Canada. He said a bankruptcy filing seemed likely no matter what happened.

"It was very clear that General Motors is in serious trouble," Lewenza said.

Industry Minister Tony Clement was asked in Parliament on Thursday why he was putting heavy pressure on the GM workers.

"What will not work is if the union heads do not want to be part of the solution," he responded. "Then the choice of the workers is to have a job that's cost-competitive or to have no job at all."   Continued...