Auto giant General Motors (NYSE:
) is in talks with the Canadian Auto Workers (
) 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
Back in July,
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:
) said that it would be reducing labor costs in Canada to ensure
that Canadian factories could be considered for future
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.
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