CAW agrees to re-open contracts with automakers

Union will strive to remain competitive with U.S. counterparts

Local union and workplace leadership in the auto sector have overwhelmingly endorsed a resolution authorizing the Canadian Auto Workers (CAW) to re-open contract negotiations with North American automakers.

In the wake of the unprecedented downturn of the global economy and the resulting financial crisis facing GM, Chrysler and Ford, more than 500 CAW local union and workplace leaders authorized the union to engage in contract discussions with the Canadian units of the three automakers as part of a broader restructuring of those companies.

The negotiations will be aimed at ensuring that active labour costs at Canadian facilities of the three companies remain fully  competitive with the companies' counterpart facilities in the United States as those operations are restructured in coming months.

Should these discussions result in a tentative agreement regarding proposed changes to the existing contracts, that agreement would be contingent upon:

- ratification by a majority of CAW members at each company

- participation by the companies in a financial assistance agreement with the Ontario and Canadian governments;

- acceptance by the companies of agreed-upon commitments regarding their future proportional manufacturing presence and activity in Canada

- development of a comprehensive and viable national auto strategy that will address the industry's challenges including one-way trade imbalances between North America and the rest of the world.

The union will also engage in broader discussions with company and government officials regarding alternative mechanisms for funding legacy benefits such as retiree health and pension benefits.

Talks between the union and the automakers are expected to begin within the coming weeks.

As part of its restructuring plans to access a $17-billion US bailout package south of the border, GM announced it will cut 47,000 jobs (most in the U.S. and Europe) and close five more U.S. factories. Chrysler said it would also cut 3,000 jobs in the U.S.

General Motors and Chrysler in Canada have until Feb. 20 to present similar recovery plans to Ottawa in order to access up to $4 billion in assistance from the federal and Ontario governments.

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