CAW has tentative labor deal with GM Canada

TORONTO -- After two weeks of round-the-clock negotiations, the Canadian Auto Workers union has struck another tentative cost-cutting deal with General Motors Canada in its bid to qualify for government loans to stave off liquidation, the head of the union said Friday.

Union leader Ken Lewenza said the deal allows GM to meet the cost benchmarks set by the Canadian and U.S. governments and stipulates that GM's car assembly and parts plants in the southern Ontario communities of Oshawa, St. Catharines and Woodstock will stay open.

"We have preserved our wages. We have preserved and secured our pension benefits. We have protected most of our core benefits. Those are important victories and they wouldn't happen without solidarity," Lewenza told a news conference.

Specific details of the deal were not immediately known, but Lewenza said it delivers reductions of 15 to 16 Canadian dollars ($13 to $14) in the average per-hour wage of GM's Canadian workers on top of a previously negotiated CA$7 ($6) cut.

CAW members had ratified a deal with GM in March, less than a year after settling a three-year wage-freeze contract, but Canada's federal and the Ontario provincial governments said two weeks ago that it did not do enough to cut costs.

The union and the automaker have been working toward an agreement on wages and other costs the governments say is needed before they provide more aid to GM.

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The governments have offered between CA$9 billion and CA$10 billion ($7.7 billion to $8.5 billion) in loans to GM Canada and Chrysler Canada if they approve of the restructuring and cost-saving measures laid out by the struggling automakers.

Workers on both sides of the border will have to vote to ratify the deals. Lewenza said the voting process will begin on Sunday.

The moves are key to GM's efforts to restructure outside of bankruptcy court. The company, which has received $15.4 billion in federal loans, faces a June 1 government-imposed deadline to restructure or be forced into bankruptcy protection.