April 18, 2008 / 1:40 PM / 10 years ago

GM Canada plans to slash labor costs: report

TORONTO (Reuters) - General Motors of Canada (GM.N) is set for a battle with its unions as it plans to regain its competitive advantage by cutting back on paid time off, allowing temporary workers, and getting rid of strict work rules, according to a Canadian national newspaper on Friday.

<p>A General Motors employee inspects Chevrolet Impalas on the production line in Oshawa, Canada August 21, 2006. REUTERS/J.P. Moczulski</p>

A background paper released by the automaker details plans to eliminate a $30-an-hour labor cost advantage versus U.S. plants operated by Japanese-based competitors, the Globe and Mail said.

The moves will most certainly be challenged by the Canadian Auto Workers union, which has repeatedly said that it will not allow a two-tiered wage system like the one the United Auto Workers in the United States agreed to last year.

Contract negotiations between the Big Three auto-makers and the CAW begin this summer.

Reporting by John McCrank; Editing by Scott Anderson

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