April 16, 2009 / 2:11 PM / in 9 years

Canada says autoworkers must make more concessions

TORONTO (Reuters) - The Canadian Auto Workers union must make more concessions to ensure a proposed cooperation deal between Chrysler and Italian auto company Fiat goes through, Industry Minister Tony Clement said on Thursday.

<p>Canada's Minister of Industry Tony Clement speaks during a news conference in the foyer of the House of Commons on Parliament Hill in Ottawa April 7, 2009. REUTERS/Blair Gable</p>

He said the union and Chrysler must forge a new agreement within two weeks to allow the Fiat deal to go ahead. If there is no agreement, Ottawa has the right to call its loans to Chrysler, he told reporters.

Clement said he understood Fiat’s demand that the union cut costs further.

“We expect that the CAW has to recognize that in order for Chrysler to survive in this country that Chrysler has to be competitive with the rest of the Canadian market,” he said.

Chrysler has until the end of the month to forge an alliance with Fiat to qualify for long-term U.S. and Canadian government aid. Labor talks between the company and the CAW are due to start next Monday.

“There has to be a CAW-Chrysler deal in the next two weeks -- the clock is ticking -- in order to allow for Fiat to continue with its partnership with Chrysler,” said Clement.

“With April 30 looming very closely on the horizon, the CAW has to do its part. ... This is not an easy thing, but the alternative is, there’s no deal in place, and if there’s no deal in place, there will not be long-term funding arrangements with the government of Canada, and in fact we have the right to call our loans.”

Reporting by John McCrank, writing by David Ljunggren and Randall Palmer; Editing by Frank McGurty

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