Canadian Auto Workers (CAW) members voted 86 per cent in favour of a cost-cutting deal with General Motors Canada as the automaker bids to qualify for more government loans and assure its future. Workers at three GM plants in southern Ontario cast ballots Sunday on the latest concession package.
According to the CAW, the tentative deal provides that the starting pay rate for new hires will be 70 per cent of the established rate with increases of 5 per cent per year for six years. New hires will be entitled to the same retiree health benefits, funded either through a new Health Care Trust or by the company.
The deal freezes pensions until 2015, eliminates semi-private hospital coverage and ends tuition assistance for workers joining the company after Jan. 1, 2010. The CAW also said a $3,500 vacation compensation payment has been cut to offset other costs, including pensions.
Under the contract, the union and the company have committed to negotiate a Health Care Trust agreement to provide retiree health care benefits. The deal also delivers reductions of 15 to 16 dollars in the average hourly labour cost of GM’s Canadian workers on top of a previously negotiated $7 cut.
“We appreciate the shared sacrifices our employees have made to better position GM in these very challenging times by meeting competitive cost benchmarks and achieving significant further reductions in longer term liabilities,” said GM Canada in a public statement. “The leadership and professionalism demonstrated by the CAW is a testament to their dedication to finding solutions to difficult challenges. The ratification of the new agreement is a critical step towards GM Canada’s successful restructuring into a stronger, more viable company.”
GM has already cut deeply into its work force, recently closing a pickup truck plant in Oshawa, with the loss of 2,600 jobs. In addition, the company plans to shut down a transmission plant in 2010 in Windsor, Ontario, which employs 1,400 people.