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GM Canada workers accept cost savings deal

THE Canadian Auto Workers union said yesterday its members had agreed to contract concessions with General Motors of Canada to help the automaker qualify for government loans.

The union said 87 percent of GM's 10,000 hourly Canadian workers voted to support the deal, which will see wages frozen, more health care costs shifted to employees, paid time off cut, and cost of living adjustments suspended or eliminated.

It also will divert employee bonuses to cover retiree health care costs, and reduce expenses for union-sponsored programs.

The union has said the agreement will cut several dollars an hour from active member costs and will result in "substantial" cost reductions on liabilities related to retired members.

"These changes are difficult for our members and retirees, but CAW members at GM agree that accepting these changes is the best choice under the circumstances," CAW President Ken Lewenza said in a statement.

"Our labor costs did not cause this global crisis, and labor concessions - no matter how deep they go - cannot solve that crisis," Lewenza said. "However, our members understand that the CAW must be part of the solution, and we have done that."

GM has plants in Oshawa, St. Catharines, Windsor and Woodstock, Ontario.

The company is seeking up to C$7 billion (US$5.4 billion) in emergency loans from the governments of Canada and the province of Ontario.

The CAW said the deal would be implemented as soon as the proposed government aid is finalized and begins to flow.

The union has said it would move on to negotiations with the Canadian arms of Chrysler and Ford Motor Co, where it would look to strike deals based on the GM agreement.

In testimony to Canada's House of Commons finance committee earlier in the evening, Chrysler President and Vice Chairman Tom LaSorda called the CAW-GM agreement "unacceptable."

He said the agreement would not eliminate even half the labor cost gap with the Japanese plants operating in Canada.

"The current agreement with GM is unacceptable and we have to break the pattern," he said.

LaSorda warned that Chrysler could pull out of Canada if it fails to win sufficient labor concessions from the CAW. He also said the company could shutter its Canadian plants if it does not get government aid, and a tax dispute is not resolved.

Chrysler is seeking US$2.3 billion in aid from Canada, representing a quarter of the US$9 billion being requested of the United States.

GM and Chrysler already have received a combined US$17.4 billion from Washington, and have sought up to another US$22 billion in emergency funding.


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