CAW concessions could pave way for Canadian GM bailout
Reuters reports that the Canadian Auto Workers leadership and General Motors Canada have agreed on a set of union concessions that, if approved by CAW members, could clear the way for both the Canadian federal and Ontario local governments to furnish the cash-starved automaker with billions more in bailout dollars. According to Reuters, the union has agreed to swallow a wage freeze through 2012, reduced vacation time, and higher co-pays on their benefits plans. These changes would come on top of proposed pay reductions for both executives and regular salaried workers, plus benefits cuts for the latter. GM hopes that the combined white-and blue-collar savings will be enough to convince Canadian officials to open up the coffers. For its part, the CAW says it'll use the GM negotiations as a model for how it'll deal with the other automakers seeking similar concessions. The Canadian developments come after a week in which the big story was GM's auditors' gloomy outlook on the company's ability to contintinue as a going concern. Stay tuned for another active news cycle this week as President Obama's auto industry task force heads to Detroit for powwows with automaker and union leaders. Everyone is in scramble mode right now because both GM and Chrysler need more money by the end of this month in order to keep the lights on. Thanks to Jarrett for the tip!
[Source: Reuters]
Reader Comments (Page 1 of 3)
Aprime 5:46PM (3/08/2009)
Do not want.
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n0ne 5:50PM (3/08/2009)
Do not want, what?
Aprime 7:52PM (3/08/2009)
A bailout.
*I don't want bailouts in general, I don't approve of anything the Wapanese governments do to support their industries, either. Socialism sucks.
n0ne 1:35AM (3/09/2009)
Wapanese? Socialism? You need to stop watching Fox News. I agree that bailouts suck, but there not much to do at this point. They shouldn't of abused there hole "buy American or your a commie" type of approach.
Aprime 1:55AM (3/09/2009)
I don't watch Fox News, I live in Canada. I've had my fair share of 'YEAH SOCIALISM WORKS', believe me, but recent governmental actions finally made me realize it just can't work unless you've got the politicians to make it work.
Economic socialism is something I despise - I love the CBC, and that's one of the good things socialism brings us here, a service we demand to keep our cultural distinctions with the US alive.
I don't think Faux News ever used the term Wapanese. Actually, it's usually used to refer to Americans or Europeans attempting to adopt what they believe to be Japanese culture.
No one deserves bailouts and governments needs to get out of economic markets and foreign politics, especially when they can't even manage their own nation appropriately (and according to the constitution).
I'm also for public healthcare even though there's no reason for private sector to jump in, but I'm against the present inefficiencies of most public health systems, which means they'd need administrative reforms in my opinion - also cut the crap and allow some form of competition within the system (not like no child left behind, that's stupid unless you do something about management). No competition? No performance. That's how it works. Can work through public private partnerships like they do with Canada Post, I don't care, as long as the service is on par with what a private offering would be (and CP is, unlike USPS).
Mazda FTW! 5:49PM (3/08/2009)
The auto industry is Ontario's engine. The Camaro and the Challenger are both made in the Toronto area.
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Lad 6:29PM (3/08/2009)
The American Automobile Industry will not be saved by the huge life-support bail-out! The only thing that will save it is for Americans to buy American cars. However, over the past eight years the American people have gone broke following the trickle-down policy and the hands-off regulation policy of the finance markets furthered by the last administration. It's difficult to buy new cars when you have troubles meeting your mortgage payment.
I think eventually GM and Ford will need to downsize and take the companies in a new direction. If it weren't for so many families losing their jobs, I would suggest reconstruction under bankruptcy. But, there is another way and that is for the companies and labor to work together to cut overhead so their products are competitive against the other world markets.
adam 7:14PM (3/08/2009)
this is a response to LAD,
ford has downsized. they have been downsizing for the last few years. cutting workers, executives, pay, # of dealers, complexity of ordering, number of overlapping vehicles and platforms, and especially getting other costs under control.
please dont lump ford with gm. they are not the same company!
i feel as though bankruptcy is becoming the only real option.
Aprime 7:56PM (3/08/2009)
When GM will go bankrupt the entire industry will follow.
I don't really care anymore, something will come out of those ashes and it will be better for us in the end.
Unless the government keeps getting into it like it does right now.
Stop screwing with the God damn markets.
MajorGeek 11:19AM (3/09/2009)
@Lad 8 years? It goes back further, do your research. People taking on laons they could not pay and often with balloon payments. I was just offered a loan for my house last September with payments equal to what I make a month. I suck at math, but not thast bad.
Also, if you believe this theory of yours, I have 18 million overseas that was seized. I can transfer this to your bank and some money to get the transfer going. I will just need you to wire me some money Western Union and I can begin the transfer.
Now, if you feel for that, is that the fault of the administration, some other countries lax rules or is it just maybe your fault for being in the 1% club of dumbest people in existence? The answer, like people taking out loans they can not pay, is your in the 1%. Not everyone losing their homes deserves this like those who lost their jobs, but plenty of them went in without considering how they would pay the load and never even took into account what might happen if they got sick, lost their job, a recession hit, fuel prices doubled and more.
"However, over the past eight years the American people have gone broke following the trickle-down policy and the hands-off regulation policy of the finance markets furthered by the last administration. It's difficult to buy new cars when you have troubles meeting your mortgage payment"
black 6:03PM (3/08/2009)
As much as I like GM cars, its really sad and pathetic to see them like this.
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Sea Urchin 6:27PM (3/08/2009)
What GM needs to do is to kill everything BUT Chevy, Caddy and Hummer.
Look no one needs a Pontiac, Saturn or Buick.
Any good car that can be sold as a Pontiac can be sold as a Chevy, G8 will simply have a bowie rather than an upside down triangle. Same with Saturn, any good car by Saturn can be sold as a Chevy, like Outlook. GM has too many brands and as i said any car worth its salt needs can be sold as a Chevy. GM spend so much money on giving Saturn fresh lineup, but all that money came at Chevy's expense, they could have spent all that money on quality small car and that investment would have paid off.
Enter the bankruptcy and get rid off debt, unions and dealers.
Many in here who say that killing brands is not the way to go simply suffer from nostalgia, they miss names like Firebird and GTO, those are NOTHING but names. It's like saying ohh i will not buy another Intel product because they did off with Pentium name. A name is just a name. Kill the garbage, concentrate on what is salvageble. Plus killing off Pontiac will allow GM to use money that would have gone Pontiac R&D and to increase Chevy's R&D.
Buick is just a dead brand in USA, Buick can not and will NEVER,EVER be able to compete with Lexus, Acura, Infinity, BMW, BENZ.
Kill off the garbage and keep what matters
Also GM needs to start selling to people with higher credit rating.
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Sean 8:54PM (3/08/2009)
Buick is not a dead brand in the USA, and it is a powerhouse of a brand in China.
Why the frak would they keep Hummer? What alternate universe sales reports are you reading that makes it look like a viable brand?
Sea Urchin 9:26PM (3/08/2009)
Hummer is a luxury, niche brand, those SUVs just need fresh vehicles and once we are out of recession they will sell. Buick is your grandpa's car, as simple as that.
Len_A 9:52PM (3/08/2009)
Buick still sells very well in China. Latest Buicks were mostly designed in GM's China studios.
Tim 6:40PM (3/08/2009)
"...the union has agreed to swallow a wage freeze through 2012, reduced vacation time, and higher co-pays on their benefits plans.
Wow wage freezes. Considering that they would be wiped out if left up to the free market couldn't a 5% wage cut be had? how about even a 1% cut?
"Reduced vacation time" Bora bora will take a hit. get ready some stimulus.
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inshullana 10:24PM (3/08/2009)
With inflation eventually going to skyrocket, that is a 5% wage cut.
Justin 6:42PM (3/08/2009)
I wish Obama will help the UAW to unionize Tesla electric car company, roflcopters.
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Tony 6:49PM (3/08/2009)
February was the first month in Canadian automotive history that GM wasn't in the top spot in sales. Not only that, but both Chrysler and Ford sold more cars than GM. Bring on bankruptcy because the public sure has.
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the vegas style guy 7:52PM (3/08/2009)
I am always amazed at the venom aimed at unions here. The unions did not create the current problems, the execs and banks did. We all know it's a lie that UAW gets more than non union workers in the southern transplants so what is the effing issue?
I can only believe it is straight up class warfare aimed at working class people who have actually managed to earn a decent living without having spent 4 or more years in college to learn how to push papers around.
Every single day here the unions are made out to be the devil. I don't see it. Also, this business of blaming pensioners sucks as well. Those people spent many loyal years at companies. They were promised things to keep them at their jobs to save the companies retraining expenses, not out of some candy colored do goodyness. They fulfilled their part of the bargain. It's not right to make them suffer because the college boys in the suits screwed everything up. Especially since those same guys don't suffer at all. They will all have their health care and pensions long after the companies they ruined are gone. Doubt it? Read their contracts.
And for any politician to even utter one word about unions and their unreasonable demands is just plain ludicrous. Name me one elected representative in any country who pays for their own health care.
I know this is about Canada, but, the current economic situation sucks all around and the people who caused it from Clinton with his love for globalization to Bush and his idiotic wars that he financed with tax cuts (!?!) to my own Obama with his complete lack of oversight of all these thieves, just make me sick.
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