GM freezes wages in Canada till 2012

March 9th, 2009 - 10:36 am ICT by IANS  

By Gurmukh Singh
Toronto, March 9 (IANS) To cut costs, auto giant General Motors (GM) Sunday froze wages and pensions for its Canadian workers until 2012. The struggling company, which will get $3 billion out of the $4-billion package announced by the Canadian government, said it had reached an agreement with the Canadian Auto Workers (CAW) union to avail of government money. The Canadian government had made it mandatory for GM to cut costs and wages to be eligible for the package.

The Canadian plants of the three auto giants - GM, Ford and Chrysler -account for about 20 percent of their total production in North America. The Canadian package for the ailing auto companies is proportion to the American package.

In a statement, GM Canada said it has reached a tentative agreement with the union to bring labour costs “to much more competitive levels” for its long- term viability.

GM, which employs about 12,000 Canadians, said the agreement is “a positive further step in GM Canada’s restructuring plan” as wanted by the government.

For its part, the Canadian workers union said the deal will generate substantial cost savings for the company.

“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,” union president Ken 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,” he said.

The agreement will be put to vote by workers next week for ratification. He said the agreement hinges on GM receiving government aid and recommitting to a proportional Canadian manufacturing presence.

“We committed that the CAW would be part of the solution to this crisis, and we have done just that.” The union president said. “But we fully understand that the industry will not be secure until governments (US and Canadian) confirm a financial assistance package for the industry, and until consumers start buying vehicles again,” he added.

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