GM strikes tentative deal with Canadian union
By John McCrank
TORONTO (Reuters) - General Motors Corp and the Canadian Auto Workers have reached a tentative deal for a substantial reduction in labor costs that will pave the way for a major GM restructuring package, the union said on Friday.
The deal, if ratified by union members, will bring labor costs at GM's Canadian operations down to about C$57 ($50.90) an hour. That's a reduction of roughly C$22 to C$23 an hour when cuts agreed to by the union and GM in March are included, CAW President Ken Lewenza said.
"It has been the toughest two weeks of our collective career of this bargaining committee," Lewenza told a news conference.
Base wages, pensions and core benefits will be protected, but the C$3,500 bonuses awarded to employees last year in lieu of lost vacation time will be filtered into GM's pension plan.
The deal will also freeze pension rates until 2015 and new hires will contribute C$1 an hour toward the pension plan from now on. The CAW said the plan is currently underfunded by C$6.5 billion to C$7 billion.
Lewenza said the deal, which includes a number of other cost-saving measures, was struck Thursday night at about 11 p.m. (0300 GMT Friday) and that it has the support of the Canadian government.
GM has been kept afloat with about $15 billion in U.S. government loans and C$500 million in loans from the governments of Canada and the province of Ontario.
For it to get long-term financing, the United States and Canada have given GM a June 1 deadline to win concessions from all its stakeholders and to prove it can be a viable company. Continued...