Chrysler funding tied to labour costs

TORONTO — Chrysler Canada must slash its labour costs to a level competitive with non-unionized plants in Canada, and the pattern established in an earlier deal reached between General Motors Canada and its union isn’t good enough, says federal Industry Minister Tony Clement.

TORONTO — Chrysler Canada must slash its labour costs to a level competitive with non-unionized plants in Canada, and the pattern established in an earlier deal reached between General Motors Canada and its union isn’t good enough, says federal Industry Minister Tony Clement.

Chrysler has said it needs to reduce its hourly labour costs by $19 an hour to be competitive with Toyota and Honda plants in Canada, but the Canadian Auto Workers union has so far insisted that it will stick to the pattern set in its March labour agreement with GM — which reduces that company’s costs by about $7 an hour.

Clement said the CAW will have to give up more to protect Canadian jobs.

“The CAW has to recognize that in order for Chrysler to survive in this country, that Chrysler has to be competitive with the rest of the Canadian market,” Clement said at a news conference in Toronto on Thursday.

“If everyone is saying — and they are saying — that Chrysler, in order to be competitive, has to go beyond the pattern in terms of cost reductions and cost competitiveness, I believe the CAW has to have regard for that,” he added.

Chrysler has been given until April 30 to negotiate a partnership with Italian automaker Fiat and to reach deals with its workers, bondholders and other stakeholders in order to receive long-term bailout loans from governments in Canada and the U.S.

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