CAW Not Close To Deal With GM

TORONTO (AP) -- The head of the Canadian Auto Workers said Friday that the union is not close to reaching a new cost-cutting labor agreement with General Motors Canada with just hours to go before a looming midnight deadline.

The federal and Ontario governments set the deadline for the two sides to agree on a deal to replace the pact that was negotiated in March. The governments have asked the union to give GM Canada the same concessions that it recently gave Chrysler Canada.

The CAW and GM agreement ratified in March provided the company with about 7 Canadian dollars ($5.76) an hour in labor cost savings. That followed an agreement last summer that froze wages and gave other concessions.

The governments hope the new deal will mimic a deal reached with Chrysler Canada late last month that provided that company with about 19 Canadian dollars ($15) an hour in savings. The CAW-Chrysler deal cut costs for the auto maker by 240 million Canadian dollars ($204 million) annually.

The governments have offered 9 billion to $10 billion Canadian dollars in loans to GM Canada and Chrysler Canada, if they approve the restructuring and cost-saving measures laid out by the struggling automakers.

"I don't think we relish this kind of participation in a private-sector company," Prime Minister Stephen Harper told reporters Friday.

"But as we have said, if all of the stakeholders in General Motors are prepared to do the things necessary to ensure the long-run viability of the company, we are prepared to work together in concert with the government of the United States to make sure that we preserve our share of auto production in this country."

Lewenza has said that if they are unable to come up with a deal by midnight, GM Canada could risk liquidation.

Although the Canadian subsidiary has said that it plans to reduce its work force by more than half by 2014, the prospect of GM Canada liquidating is daunting, given that the company currently employs about 10,300 hourly workers, mainly in southern Ontario.

Along with direct job losses if the company liquidates, industries that revolve around the auto sector also risk folding or severe restructuring.

General Motors said Friday that it will terminate about 1,100 U.S. dealership franchises late next year.

The cuts are part of a larger GM plan to slash 2,600 of its 6,200 dealerships as the auto maker tries to restructure to become profitable again.

GM's action Friday comes just a day after Chrysler announced it will drop 789 of its roughly 3,200 dealerships.

In Canada, a truck plant in Oshawa, Ontario, which had been in operation since 1965, and produced 10 million vehicles, closed on Thursday. A transmission plant in Windsor, Ontario, is slated to close next year.

As the list of plant and dealership closures grows, the possibility of General Motors Corp. filing for bankruptcy protection mounts.

General Motors Corp. chief executive Fritz Henderson has confirmed the company is considering filing for bankruptcy. However, the company is still holding out hope that it can restructure without court protection and is looking at its operations country by country, Henderson said.

Lewenza said the governments would provide debtor-in-possession financing for GM Canada in the event it seeks bankruptcy protection.

GM faces a June 1 deadline to present its restructuring plans to government.

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