TORONTO — The head of the Canadian Auto Workers says the federal and Ontario governments are forcing the union and General Motors Canada to come up with a new labour agreement by the end of next week in order for the company to get bailout funds.
Ken Lewenza said the governments have set a strict deadline of May 15 for the two sides to reach a new agreement, to replace one that was negotiated in March before the CAW agreed to even bigger concessions with Chrysler.
“If we don’t get a deal, the governments will provide no financial support and GM Canada will be liquidated,” Lewenza said at a news conference Thursday.
“Who would ever think that General Motors could possibly be in a position where they could potentially liquidate and potentially have no existence here in Canada? It’s quite frightening,” he added.
But Ontario Economic Development Minister Michael Bryant said that’s a “worst-case scenario” and said he’s confident the two parties will be able to reach a deal.
Federal Industry Minister Tony Clement said the choice was clear for GM employees.
“What will not work is if the union heads do not want to be part of the solution. Then the choice of the workers is to have a job that is cost competitive or to have no job at all,” Clement said during question period.
GM Canada said it would do what it can to meet governments’ demands.
“We plan to engage in the discussions with the CAW as required by the governments and we expect to complete our restructuring in Canada and emerge a strong and competitive company in Canada,” company spokesman Stew Low said in an e-mailed statement.
The CAW said the governments’ main issue with the previously ratified agreement is that it fails to reduce GM Canada’s legacy costs — primarily pension obligations — enough.
But Bryant said retirees’ pensions won’t be touched, and the company will be asked to find cost savings in other ways.