OTTAWA — The Canadian Auto Workers union agreed to a series of contract concessions with General Motors of Canada on Sunday in a deal that avoided reductions to base salaries or pension benefits.þþThe agreement, to be voted on by union members later this week, came after three days of talks. Ken Lewenza, the union’s president, told a midday news conference that the cost savings from the plan were still being calculated.þþ“At 5:30 this morning, General Motors had stated to us that we have maintained our Canadian advantage for investment in Canada,” Mr. Lewenza said. “That’s all that’s important to us.”þþG.M.’s Canadian unit, which is based east of Toronto in Oshawa, Ontario, said in a brief statement that the agreement would bring “labor costs to much more competitive levels and help ensure the company’s long-term viability.” þþThe company, which is seeking about $6 billion in assistance from Canada, did not respond to questions about the anticipated size of the savings. þþThe Conservative government said that it would provide financial aid to G.M. and Chrysler Canada only if the union agreed to match the labor costs at plants operated by Toyota and Honda in Canada. As in the United States, there has been considerable debate about the differences in labor costs between the Japanese- and American-owned companies.þþThe savings at G.M. Canada, whatever the amount, will come from several sources. Increases to pension payments and wage rates to cover inflation have been suspended until June 2012, and an additional payment of 1,700 Canadian dollars, or $1,321, a year will be eliminated. Workers will also receive one less week of paid vacation a year. þþThe most significant changes appear to involve health care. The bulk of the health care costs of Canadian workers are covered by government programs. But General Motors, like many employers, covers expenses that are outside the state system, including dental, eyeglasses and prescription drugs for workers under the age of 65.þþUnder the proposed agreement, workers will contribute 30 Canadian dollars ($23.31) a month toward the benefits. Retirees over 65 will pay half that amount.þþWhile it is not part of the agreement, the recent decline of the Canadian dollar appeared to be a factor that allowed the union to avoid wage cuts. In the last year, the Canadian dollar has fallen from about parity to a roughly 25 percent discount relative to the United States dollar.þþDuring the news conference, Jim Stanford, the union’s chief economist, acknowledged that if the Canadian currency returned to par, labor costs at Canadian plants would exceed those in the United States. However, he also dismissed the possibility of Canadian dollar strengthening to that extent by September 2012, when the proposed agreement would expire.þþIf approved by the 10,000 unionized G.M. workers in Canada, the contract will extend an agreement reached about a year ago for another 12 months. The union claimed that the earlier contract collectively reduced Canadian labor costs at G.M., Ford and Chrysler by about 900 million Canadian dollars, or $699 million. þþMr. Lewenza urged the governments of Canada and Ontario to swiftly provide aid to General Motors once the contract is approved. “We believe we can get the rumors of bankruptcy off the table once and for all,” he said.þþOfficials at both levels of government, which have set the end of the month as a deadline for their negotiations with the automakers, welcomed the settlement. þþMr. Lewenza said last week that the union would also negotiate new agreements with the Canadian units of Chrysler and Ford. As is the case in the United States, Ford is not looking for government assistance in Canada.þþ
Source: NY Times
