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GM, Canadian union agree to wage, pension freeze
2009-03-08
OTTAWA (AFP) - The Canadian Auto Workers announced a tentative deal with General Motors on Sunday to freeze wages and pensions, and cut paid vacations, as part of GM's North America restructuring. The agreement would "generate substantial cost savings for the company while protecting current base wage rates and current pensions," CAW President Ken Lewenza said in a statement. These savings are estimated at tens of millions of dollars, based on labor cost reductions of "several dollars per hour" for each of GM's roughly 10,000 unionized staff in Ontario province. As well, GM's Canadian operations would retain an "investment advantage" over US plants, Lewenza said. The beleaguered auto giant said last month it would need an additional 22.6 billion dollars US in government aid if it is to survive a collapse of global auto sales amid a deepening recession. The company is also asking for up to 7.5 billion Canadian dollars (6.0 billion US) in aid from Canada's government. The union entered talks on Friday with GM on a worker "sacrifice agreement" to try to find labor savings in its Canadian operations, as Ottawa's insistence. The Canadian government had asked the union to share the burden of GM's cost restructuring as a condition of any taxpayer-funded bailout. The tentative pact must still be ratified mid-week by GM workers. "Our objective coming into these negotiations was to minimize the pain felt by our members and their families, while ensuring that General Motors was well positioned to receive government assistance to remain viable," Lewenza said. "At the same time, we understand that workers didn't cause this crisis, which was caused by the global financial meltdown and ensuing credit freeze." Under the terms, GM's current labor contract would be extended by one year to September 2012. Base wages and pensions would remain frozen until then. As well, employees would receive one fewer week -- 40 fewer hours -- each year of paid vacation, in addition to a 40-hour reduction implemented in January. A 1,700-dollar (1,300 US) "special bonus" would be diverted to help pay for retirees' health care. Expenses for training, wellness programs, and child care would be cut by one-third. Also, GM and its unionized staff would split premiums for benefits such as health care, collecting 30 dollars (23 US) per month from each worker, and 15 dollars (12 US) from each retired worker over 65.
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