Ford Motor Co.
), Canadian Auto Workers (CAW) union has ratified the 4-year
General Motors Company
). About 73% of union members have accepted the deal. Under the
deal, GM would create or save 1,750 jobs and invest C$675 million
($692 million) in its Canadian plants.
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The agreement included 5,600 CAW workers represented by GM in
Ontario. The workers belong to a vehicle assembly plant in Oshawa
that manufactures Chevrolet Impala and the Cadillac XTS, as well as
a plant in St. Catharines that produces V-8 and V-6 engines.
The CAW union already ratified its 4-year agreement with Ford last
week. The new contract will help both Ford and GM lower labor costs
Under both the Ford and GM agreements, workers will be paid 60%
(instead of 70% previously) of the highest hourly wage rate of
C$33.89 (US$34.74), which would be $20.40, a decline from C$23.80
previously. The wages would take 10 years instead of 6 years to
reach the highest level.
The new agreement also includes lump-sum bonuses for workers
instead of cost-of-living adjustment bonus for the first three
years. Both GM and Ford workers will receive C$2,000 ($2,039)
lump-sum payments in the contract's second, third and fourth years
in lieu of cost-of-living adjustments and a C$3,000 ($3,059)
The new deal would also alter retirement plans for new hires. It
will move half the pension into a defined-contribution plan where
workers will pay certain amount into a pension fund while the
eventual payment will depend on the fund's performance. At the time
of retirement, the company is bound to make up the shortfall if the
pension fund underperforms.
Under the deal, GM would extend the operation at its consolidated
assembly line in Oshawa, Ontario, for one more year. The plant was
supposed to close in June next year. It will also add a third shift
of 900 workers at another plant in Oshawa and 100 jobs at an engine
and transmission plant in St. Catharines, located southwest of
The Canadian Auto Workers (CAW) union has wrapped up its labor
negotiation with the remaining Detroit automaker, Chrysler Group
LLC, majority-owned by
). Among the Detroit Big Three, Chrysler operates the largest
facility in Canada. The ratification vote for Chrysler agreement is
scheduled for September 29 and September 30.
GM, a Zacks #3 Rank (Hold) stock, reported a sharp 41% fall in
profits to $1.49 billion or 90 cents per share in the second
quarter of the year from $2.52 billion or $1.54 in the same quarter
of 2011. Nevertheless, profits exceeded the Zacks Consensus
Estimate by 15 cents per share.
Revenues in the quarter fell 4.5% to $37.61 billion, which is lower
than the Zacks Consensus Estimate of $37.98 billion. Unit sales
rose 3% to 2.39 million vehicles from 2.32 million vehicles in the
second quarter of 2011. The automaker occupied a worldwide market
share of 11.6% during the quarter, down from 12.3% a year-ago.
The decline in profits and revenues was attributable to
strengthening of U.S. dollar against most of the major currencies
as well as weak macroeconomic conditions globally, especially in
Europe and South America.