The Canadian Auto Workers union has ratified a new contract with General Motors that should help substantially reduce the automaker's operating costs in Canada. The template of the agreement is very similar to the one reached here in the U.S. between Ford and the UAW recently.
CAW said 87% of its GM workers voted to accept frozen wages, paying more for health care and losing some paid time off, among other rollbacks. However, the cuts won't take effect until Canada's government finalizes and distributes aid money to General Motors. The U.S. automaker has asked the Canadian government and province of Ontario for up to C$7 billion ($5.4 billion) in loans.

UPDATE: GM's official statement included after the jump.

[Source: Automotive News, sub. req'd]

GM Statement Regarding the Ratification of the CAW Agreement and Update on Cash position

Attributable to Ray G. Young, GM executive vice president and chief financial officer

As GM Canada announced last night, the members of the Canadian Auto Workers (CAW) union have ratified a new competitive agreement with GM Canada (GMCL), which is vital to the continued transformation of the Canadian operations. The agreement between GMCL and the CAW will quickly reduce costs in Canada by significantly closing the competitive gap with U.S. transplant automakers on active employee labor costs and substantially reducing GMCL's legacy costs by introducing cash contributions for health benefits, increasing employee health care cost sharing, freezing pension benefits and removing hourly pension cost of living adjustments.

In addition, GMCL and the CAW will work together with the Canadian government to explore the possibilities of adopting a similar approach to the GM UAW VEBA in the U.S. GM is also continuing its negotiations with the Canadian and Ontario governments for support for the Canadian operations during this unprecedented industry downturn.

In the U.S., GM has also indicated they have advised the Presidential Task Force on The Auto Industry that the $2 billion of funding previously requested for March would not be needed at this time. This development reflects the acceleration of GM's company-wide cost reduction efforts as well as pro-active deferrals of spending previously anticipated in January and February. GM will remain in regular contact with the Presidential Task Force on the Auto Industry on the status of GM's restructuring actions, its liquidity position, timing of future funding requests, and other relevant topics of mutual concern.

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