GM, Canadian union still in concession talks

Sun May 17, 2009 10:31pm EDT
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TORONTO (Reuters) - The Canadian Autoworkers union is still in talks with embattled General Motors Corp on a deal that will cut the automaker's costs, but a number of key issues remain unresolved, the union said on Saturday.

An evening statement from the union said the talks had made some progress. A government-imposed midnight deadline on Friday for an agreement to help make the company's Canadian operations viable passed overnight without a deal.

"Our CAW negotiating team continues to work hard to reach an agreement with General Motors," CAW President Ken Lewenza said in the statement. "We will continue our talks as we work toward reaching a tentative agreement that we can bring back to our membership for ratification."

The CAW reached an initial deal with GM in March, but the Canadian government said that did not go far enough. It wants GM to get its total labor costs -- for active workers and for retirees -- in line with non-unionized plants that Toyota operates in Canada in order to qualify for taxpayer-funded loans.

"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," Prime Minister Stephen Harper said on Friday.

GM, which has been kept afloat with $15 billion in U.S. federal loans, burned through $10 billion in the first quarter. It has said bankruptcy by June is probable as it tries to slash $27 billion in bond debt and cut up to 40 percent of U.S. dealers.

($1=$1.18 Canadian)

(Reporting by Janet Guttsman; Editing by Peter Cooney)

<p>The entrance of the General Motors of Canada head office is seen in Oshawa March 31, 2009. REUTERS/Mike Cassese</p>