Union leader Ken Lewenza said the CAW was pressured into a deal after the United Auto Workers agreed Thursday to a tentative deal with the U.S. government and GM Canada's parent company, General Motors Corp.
"There was a sense of urgency after the UAW reached a deal. GM told us that the UAW got a deal that would include restructuring at its Canadian operations and the plans had to be on President Obama's desk in next two or three days for him to make approvals," he said.
Lewenza said the deal allows GM Canada to meet the cost benchmarks set by the Canadian and American governments, namely that the automaker make concessions to become cost-competitive with Toyota Canada. The deal also stipulates that GM's car assembly and parts plants in the southern Ontario communities of Oshawa, St. Catharines and Woodstock will stay open.
"We have preserved our wages. We have preserved and secured our pension benefits. We have protected most of our core benefits. Those are important victories and they wouldn't happen without solidarity," Lewenza told a news conference.
Specific details of the deal were not immediately available, but Lewenza said it delivers reductions of 15 to 16 Canadian dollars ($13 to $14) in the average per-hour wage of GM's Canadian workers on top of a previously negotiated CA$7 cut ($6).
Lewenza said the concessions reached will make GM competitive with Totoya, which is what the governments had requested.
CAW members had ratified a deal with GM in March, less than a year after settling a three-year wage-freeze contract, but Canada's federal and the Ontario provincial governments said two weeks ago that it did not do enough to cut costs.
The union and the automaker have been working toward an agreement on wages and other costs the governments say is needed before they provide more aid to GM.
The governments have offered between CA$9 billion and CA$10 billion ($7.7 billion to $8.5 billion) in loans to GM Canada and Chrysler Canada if they approve of the restructuring and cost-saving measures laid out by the struggling automakers.
"The government of the U.S. has made a decision it will engage in politically driven restructuring of GM," Prime Minister Stephen Harper told reporters in Calgary.
"Either we participate or these companies which are big in the economy will simply be restructured out of Canada. That's not a reasonable alternative. We are committed to participating," he said.
Workers on both sides of the border will have to vote to ratify the deals. Lewenza said the voting process will begin on Sunday.
The moves are key to GM's efforts to restructure. The company, which has received $15.4 billion in federal loans, faces a June 1 government-imposed deadline to restructure or be forced into bankruptcy protection.
But GM also needs bondholders who hold $27 billion in unsecured debt to forgive what they're owed in exchange for an equity stake in the company. Analysts have said it is nearly impossible that the required 90 percent of bondholders will agree to the offer, making a bankruptcy protection filing likely.
