GM workers in 4 Ontario cities ratify new deal

GM workers in four Ontario cities voted overwhelmingly in favour of a new collective agreement, the union said Monday.

Workers at GM plants in Oshawa, St. Catharines, Windsor and Woodstock ratified the deal struck late last Thursday by 86 per cent, the Canadian Auto Workers union said in a release.

"This has been a gruelling restructuring process, and no one has felt that more than our members and retirees," CAW president Ken Lewenza said in the release.

"Although we were forced to make a number of important sacrifices, the support we received from our members is proof that they recognize the incredible challenges the industry is facing."

The company faces a May 31 deadline to present its restructuring plan.

The agreement would slash annual labour costs by more than $8,000 per worker, but wages and pension benefits are protected.

Under the deal, the company is also committed to addressing a shortfall of more than $6.5 billion in the pension plan, the CAW said.

Lost vacation time

The union said the agreement will lower GM's hourly labour costs by $15 to $16 per hour per worker. That is in addition to the $7 per hour in cuts reached through a labour deal between the company and the union in March.

Union members will forgo a $3,500 lump-sum payment to each worker for lost vacation time. That money, said Lewenza, is expected to be funnelled toward the pension fund.

Pension issues were one of the major items, with Lewenza saying Friday that the union has agreed to a pension benefit freeze extending through 2015.

He pointed out that the pension plan for the workers is only 39 per cent funded on a windup basis.

Union pension official Sym Gill said the pension shortfall is roughly $6.5 billion to $7 billion, adding that the pension is expected to be back on a fully funded basis in 10 years.

Federal aid won't cover pension shortfall

A money-saving deal between the automaker and the union is a key requirement of General Motors Canada getting financial backing from the governments of Canada and Ontario.

Federal Industry Minister Tony Clement said Monday that any money lent from the federal government to the struggling company will not go toward topping up GM Canada's pension shortfall.

He implied that the pension plan will be the responsibility of the Ontario government.

"The fact of the matter is, we're each taking a role and responsibility in the areas where we have those roles and responsibilities. That's what a true partnership can be about," Clement told reporters after an infrastructure announcement in Toronto.

"I want to commend Ontario for taking the lead role in negotiating some of the aspects of the CAW agreement when it pertained to pensions. I think that was a very positive thing Ontario did — they recognized their role and responsibility and they acted on it."

Ontario said there won't be an agreement on who will be responsible for covering the plan's shortfall until a final restructuring plan is presented.

Premier Dalton McGuinty said previously that Ontario has no plans to bail out GM pensioners. He warned in April that the province's pension guarantee fund isn't big enough to cover the automaker's retirees if the company goes under and the best way to protect workers is to keep the company afloat.

The tentative deal struck last Thursday came just a day after General Motors reached an agreement with the United Auto Workers, a development that seemed to spur both sides in the Canadian negotiations.

Last week, Lewenza said he expects GM will file for bankruptcy protection in the United States, although he was unsure if GM Canada will file for court-ordered creditor protection.

He said the new labour agreement is protected even if the company files for protection under the Companies' Creditors Arrangement Act.