After two weeks of intense negotiations, General Motors Canada and the Canadian Auto Workers (CAW) union have reached a deal that will help the automaker cut costs, allowing it to meet the terms for additional government loans. Ken Lewenza, head of the CAW, said it was "a struggle" to reach a deal with GM, but he added that the union had done the best it could under the circumstances, saying: "we have protected most of our core benefits."

Wages, pensions and most benefits were preserved, although restructured in some instances. The union's pension rates will be frozen until 2015, for instance. The deal also keeps GM's plants in Oshawa, St. Catharines and Woodstock open for the foreseeable future. In total, it is believed that the new deal will result in $15 to $16 hourly wage savings on average. The announcement comes a day after the UAW reached a deal of its own with GM.

Although a different agreement was signed with the CAW in March, it had been rejected by the provincial and federal governments who wanted more cost-cutting to avoid bankruptcy. Although GM now appears to be heading in the same direction as Chrysler, hopefully there will be enough progress before the June 1 deadline to keep Chapter 11 a viable option. All told, the recent deals mean that 16 GM factories will close and an additional 21,000 hourly workers will be out of a job.

[Source: CTV]