The Canadian Auto Workers (CAW) union reached agreement on Monday with General Motors (GM) to reduce labor costs, paving the way for authorities to further fund the ailing US auto giant.
About 10,000 CAW members “voted overwhelmingly in favor of a new collective agreement, ratifying the deal by 86 percent,” the union said in a statement following the tentative agreement reached with GM on Friday.
The cost-cutting move, which involves about a US$15 to US$16 wage cut per hour, was demanded by Ottawa and the Ontario government as part of a joint bailout of GM, to try to make the company more competitive with Japanese and European automakers.
“Although we were forced to make a number of important sacrifices, the support we received from our members is proof that they recognize the incredible challenges the industry is facing,” CAW president Ken Lewenza said.
GM said it “welcomed” the ratification of the new agreement, praising “the shared sacrifices” of employees and the CAW’s “leadership and professionalism.”
“The ratification of the new agreement is a critical step toward GM Canada’s successful restructuring into a stronger, more viable company,” the automaker said.
The company has asked for a loan of C$3 billion (US$2.7 billion) from the Canadian and Ontario governments, and billions more from Washington, to keep it afloat as it restructures its North American operations.
Ottawa had set a May 15 deadline to reach a deal, but the talks continued until Friday and votes were cast over the weekend.
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