General Motors Starts Negotiations with Canadian Auto Workers

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Auto giant General Motors (NYSE: GM ) is in talks with the Canadian Auto Workers ( CAW ) after national contract negotiations began on Tuesday. CAW President Ken Lewenza commented on the discussion, which revolved around issues such as two-tier wages and profit-sharing as "frank."

Back in July, Benzinga reported that 42,000 General Motors retirees were choosing between a lump-sum buyout on annuity.

General Motors is planning to close its pension plan by the end of this year in order to remove the $26 billion liability from its balance sheet. However, the move is not without opposition; many retirees feel that the payout might sound like a lot initially, but it may not be enough to last their entire lives.

Around the same time, Ford (NYSE: F ) said that it would be reducing labor costs in Canada to ensure that Canadian factories could be considered for future projects.

An anonymous Ford source told The Detroit News that, "We're really looking at this round of negotiations as an opportunity to improve the competitiveness of the Canadian operations. Canada has higher labor costs than anywhere else we do business. It's not sustainable."

Ford said that its 4,500 assembly workers at the three Canadian factories earn $34 per hour base, compared with the U.S. base of $28 per hour. Lewenza said that, "We have been meeting with all three companies and trying to define active costs. Where we're apart is because of the rising Canadian dollar. We don't have any control over that."

Lewenza has said that the CAW will not accept profit-sharing or two-tier wages as a viable option, but he did tell The Detroit News that the initial talks have been "constructive," as were the talks with Ford and privately-owned Chrysler.

"We'll find out what company we feel we can get a deal with minimal pain," he said. "The industry has come a long way since 2009. The companies have learned to make money, even at low volume. Workers' sacrifices have been a big part of that success."

On Wednesday, General Motors traded flat at about $20.20.

Follow me @BCallwood .

(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Investing Ideas

Referenced Stocks: CAW , F , GM

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