Ford Motor Co.
), Canadian Auto Workers (CAW) union has reached a tentative 4-year
deal with another Detroit automaker
General Motors Company
). Under the deal, GM would create or save 1,750 jobs and pump in
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. It would also require GM to extend the operation at its
consolidated assembly line in Oshawa, Ontario, for a year. The
plant was supposed to close in June next year.
Few days back, Ford reached a tentative 4-year deal with CAW union
that would create 600 jobs and help the company save costs by
paying lower hourly wages to new hires.
The workers-union has accepted a cut in starting wages ($24 per
hour) that would take 10 years to reach $34 per hour instead of 6
years. The deal also included lump-sum payments of C$2,000 ($2,050)
in lieu of raises and a C$3,000 ($3,076) ratification bonus. GM
agreed to make the lump-sum payments same as Ford.
CAW-represented employees at both GM and Ford are yet to ratify the
agreement. After GM and Ford, CAW will turn to Chrysler for a deal.
Chrysler, controlled by Italy's
), operates the largest facility in Canada among the Detroit Big
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.