GM, Canadian Union Resume Talks Over Cost-Saving Labor Contract

[Omaha Steve]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aoTPa6Vy1LIA&refer=home

By Frederic Tomesco and Katie Merx

May 16 (Bloomberg) -- General Motors Corp. and the Canadian Auto Workers union resumed talks today over a new contract that would cut costs and lower the risk of liquidation of the automaker’s operations in Canada.

Canada’s federal government and its Ontario counterpart had given GM and the CAW until midnight New York time yesterday to reach a deal. That deadline passed without an agreement.

“The government called us last night and suggested they want a report no later than the latter part of this afternoon,” CAW President Ken Lewenza told CBC Newsworld television in an interview from Toronto today. “We are trying to get a deal so we can at least report to them that the loans they are providing to General Motors are secure. That’s our objective and we will see what happens.”

GM’s Canadian negotiations take place as the company operates on $15.4 billion in U.S. Treasury funds. The carmaker is working to shave operating costs and shrink debt and union- retiree obligations by $44 billion in advance of a U.S. government-imposed June 1 bankruptcy deadline.

Health care and pension costs are the biggest stumbling blocks, Lewenza told CTV Newsnet in a separate interview. He said union negotiators are trying to keep wages unchanged and instead find savings in other areas. GM has about 12,000 employees and 25,000 retirees in Canada.

FULL story at link.