Friday, May 22, 2009

GM, Canada Union Reach Accord to Trim Labor Expenses

General Motors Corp. and the Canadian Auto Workers tentatively agreed to a new labor accord including a freeze on pension benefits until 2015 to help cut costs.

Retirees and employees will have to pay “health-care fees,” or copayments, and active workers will have cost-of- living benefits fixed at current levels, CAW President Ken Lewenza said today. Stew Low, a GM spokesman, confirmed that a deal had been reached.

“It has been the toughest two weeks of our collective experience,” Lewenza said on a conference call. “We’re out here talking today about preserving the Canadian auto industry.”

GM needed union approval for new contract terms to help secure Canadian government aid. The CAW had said that GM risked liquidation of its Canada operations. The government said the CAW needed to make its labor costs comparable to those of Toyota Motor Corp. in Canada.

The United Auto Workers union said yesterday that it reached a tentative cost-saving agreement with the automaker. The union, which represents GM’s U.S. hourly workforce, plans to present details to local elected officers and hold ratification votes next week.

GM, propped up with $15.4 billion in emergency U.S. loans, faces a probable bankruptcy filing in its home market by June 1, the deadline set by President Barack Obama to restructure outside of court.