May 15, 2009 / 7:01 PM / in 8 years

Canada won't back GM without sacrifices by all: PM

TORONTO (Reuters) - Prime Minister Stephen Harper said on Friday taxpayer support for General Motors Corp’s Canadian operations hinges on all stakeholders making sacrifices, even as the head of the Canadian Auto Workers said GM was expecting too much from concession talks.

<p>Canadian Prime Minister Stephen Harper, announces a $950 million dollar construction plan to build a new light rail transit line to be completed by 2013 in the Sheppard East area, at the Toronto Transit Commission (TTC) headquarters in Toronto, May 15, 2009. REUTERS/Mark Blinch</p>

Harper made the comments just hours ahead of the government-imposed deadline of Friday night for the CAW union and GM to strike a cost-savings deal meant to help make the company’s Canadian operations viable.

“The taxpayers of Canada cannot be expected to support the restructuring unless the restructuring will be successful and that is going to require difficult decisions on the part of everyone,” he told a news conference in Toronto.

Ken Lewenza, the CAW’s president, told CBC News shortly after Harper spoke that General Motors Corp’s expectations for union concessions were too high.

He said the union could not possibly meet those expectations, but the two sides would continue bargaining.

Lewenza said GM was looking for more concessions than the union recently made to Chrysler, and that the high number of pensioners at GM compounds the problem.

The government has said GM must get its total labor costs in line with non-unionized plants that Toyota operates in Canada. Total labor costs include those related to active workers, retired workers, taxes, benefits and a host of other items.

While Toyota Canada’s compensation to hourly workers is close to that of GM Canada‘s, Toyota has made vehicles in Canada for a little more than 20 years and has almost no retirees.

By contrast, GM Canada has been in business for about a century and has about five retirees for every active employee, while Chrysler Canada has about 1.5 retirees for every active worker.

The CAW-Chrysler deal was struck at the end of last month and will save the company about C$240 million ($205 million) a year.

In March, the union reached a deal with GM that the company said would save it nearly C$1 billion a year related to retirees, on top of substantial savings on the active worker side.

But the government said the March deal failed to go far enough to justify it giving GM the taxpayer-funded loans needed to keep it afloat, and ordered to two sides back to the table.

($1=$1.18 Canadian)

Reporting by John McCrank; Editing by Frank McGurty

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