GM reaches cost-cutting deal with Canadian union
The Canadian Auto Workers union on Monday reached an agreement with General Motors to reduce labor costs, paving the way for authorities to further fund the ailing US auto giant.autos Updated: May 26, 2009 11:11 IST
The Canadian Auto Workers union on Monday reached an agreement with General Motors to reduce labor costs, paving the way for authorities to further fund the ailing US auto giant.
Some 10,000 CAW members "voted overwhelmingly in favor of a new collective agreement, ratifying the deal by 86 per cent," following the tentative agreement reached with GM on Friday.
The cost-cutting move, which involves about a 15-16 dollar wage cut per hour, was demanded by Ottawa and the Ontario government as part of a joint bailout of GM, to try to make the company more competitive vis-a-vis Japanese and European car makers.
"Although we were forced to make a number of important sacrifices, the support we received from our members is proof that they recognise the incredible challenges the industry is facing," said CAW president Ken Lewenza in a statement.
The company has asked for a loan of three billion Canadian dollars (2.7 billion US dollars) from the Canadian and Ontario governments, and billions more from Washington, to keep it afloat as it restructures its North American operations.
Ottawa had set a May 15 deadline to reach a deal, but the talks continued until Friday and votes were cast over the weekend.
GM is expected to present Ottawa and Washington with its restructuring plan by June 1.
The agreement, which also includes major benefits, wages and pension concessions but keeps plants open in Ontario province, came days after GM secured a similar cost-cutting deal with its unionized American workers.