GM Canada, CAW Begin Concession Talks

Canadian Auto Workers union said it is willing to make concessions as it negotiates with the GM Canada to help the company cut costs in its bid to qualify for government aid.

TORONTO (AP) -- The Canadian Auto Workers union said Thursday it is willing to make concessions as it enters into negotiations with the Canadian subsidiary of General Motors Corp. to help the company cut costs in its bid to qualify for government aid loans.

Union president Ken Lewenza said the CAW has reviewed the United Auto Worker's tentative agreement and will negotiate its terms based on that agreement, while stressing one key point: that Canada must maintain its market share.

"Collective bargaining isn't about power or flexing muscles, this is about both sides coming up with an agreement that maintains the Canadian investment advantage that will allow us to continue to have jobs here in Canada," said Lewenza during a news conference.

GM Canada, which is eligible for loans of up to 3 billion Canadian dollars ($2.3 billion) under a government aid package, submitted a restructuring plan last month that outlines measures to enable the company to maintain its dwindling work force and presence in Canada's auto industry. The company must prove that it is viable and able to repay the loans to qualify for the federal and provincial funds.

"If taxpayer money is going to be invested, lots of taxpayer money is going to be invested, in one or more of these enterprises, then there should be some assurance that this is not going to be a waste of taxpayer money, that it will result in a sustainable industry in Canada," Canadian Finance Minister Jim Flaherty said in Washington, where he was meeting with U.S. officials to discuss the auto bailout.

GM Canada's viability plan hinges on what happens with its parent company, which sparked long-held fears Thursday after GM filed an annual report with the U.S. Securities and Exchange Commission revealing that auditors have raised substantial doubt about its ability to continue operations. Deloitte & Touche LLP auditors revealed concerns that the U.S. automaker may have to seek bankruptcy protection if it can't execute a huge restructuring plan.

"We're very much concerned about the fragility of General Motors, and Ford and Chrysler for that matter. All of those reports concern our union, our members, and the role of auto workers in Canada," Lewenza said.

"But, we believe the quicker we get this behind us, the quicker General Motors gets its loans, the quicker the terms and conditions of the loan are done, we can turn the page and get the company back on track without the negativity that's associated with this restructuring."

GM has already received $13.4 billion in federal loans and is seeking a total of $30 billion from the government. Its restructuring plan also includes laying off 47,000 workers worldwide by the end of the year, which include about 4,000 that will be cut in Canada. GM will also close five more U.S. factories.

"The world is going through a recession, but the auto industry is going through a depression," said Lewenza, who spoke to reporters a day after Chrysler Canada said it will eliminate the third shift at its minivan plant in Ontario, costing 1,200 jobs. It was the last auto assembly plant in Canada to employ a third shift.

Despite the doom and gloom, Lewenza said from the union's perspective, the auto industry can survive with government intervention.

He said the CAW has committed itself to staying cost competitive with United Auto Workers plants in the U.S., without having to make any concessions on wages or benefits.

GM Canada has said that it is in discussions with the federal and Ontario governments and the CAW about setting up a health-care plan similar to a union-owned-and-directed system similar to that of GM's Detroit-based parent.

The company has also said reducing pension costs will be an important part of the automaker's discussions with the CAW but that it wants to maintain existing pension rates and health-care benefits for its retirees.

GM has also said it wants wage reductions to be part of the discussions.

The union has already provided 900 million Canadian dollars ($697 million) in concessions to GM, Ford and Chrysler by agreeing to a three-year wage freeze last spring that expires in 2011.

Lewenza said he hopes to ratify an agreement with GM by March. 15, and will treat any GM agreement as the "pattern" that will be applied to negotiations with Chrysler and Ford, which he hopes to have completed by the end of March.

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