May 12, 2009 / 4:42 PM / in 9 years

CAW union says pressing for new GM Canada deal

TORONTO (Reuters) - The Canadian Auto Workers union said on Tuesday it is working hard to reach a new contract agreement with General Motors of Canada ahead of a government imposed deadline of May 15, but cautioned there are no guarantees a cost-saving deal will be reached.

<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>

The union said at the end of last week that Ottawa had warned that without new cost concessions with the struggling automaker, GM would likely be forced to liquidate its Canadian operations.

“This is extremely painful and that we’re doing everything within our power to protect the interests of our active and retired members,” said Chris Buckley, chairman of the CAW-GM bargaining committee and president of CAW Local 222 in Oshawa, Ontario.

“The alternative is the company going into liquidation (in Canada) and we’re trying to avoid that because then nobody wins.”

The CAW and GM began bargaining on Sunday and Buckley said the two sides were pushing hard to meet the government’s deadline, “but there are no guarantees.”

A spokesman for GM Canada was not immediately available for comment.

GM’s CEO said on Monday that it was probable the company would have to seek bankruptcy protection to help it restructure.

The union reopened its three-year collective agreements with GM and Chrysler, reached last May, to help the companies survive the brutal downturn in the auto sector and qualify for government aid.

The CAW and GM reached a new agreement in March that the company said would made its Canadian plants cost competitive with its U.S. operations.

However, the federal government said that deal did not go far enough for them to justify supporting GM with taxpayer-funded loans.

The union later stuck an agreement with Chrysler that would put its labor costs on par with nonunionised automakers operating in Canada, such as Toyota and Honda -- a move that Ottawa supported.

“Unfortunately, General Motors is a totally different situation,” said Buckley, noting that costs related to retirees at GM are much higher than at Chrysler.

Labor costs include the costs of active workers, retirees, payroll taxes, and benefits, among a host of other items.

General Motors, whose origins in Canada date back more than a century, has about five retirees for every active worker. Chrysler has about 1.5 retirees for every active worker, while Toyota, which is not unionized, has very few retirees in Canada, where it first set up shop in 1987.

Separately, GM Canada is set to shutter its Oshawa truck plant on Thursday, putting about 2,600 people out of work.

GM Canada currently employs about 10,300 hourly workers but has said that number will fall substantially as planned plant closures take effect.

Reporting by John McCrank; editing by Rob Wilson

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