Chrysler workers approve deal reached by company, CAW

Thousands of Chrysler Canada workers voted Sunday in favour of a tentative deal between the ailing automaker and their union.

The deal was approved by 87 per cent of those Chrysler Canada workers who voted over the weekend, the Canadian Auto Workers union said in a release. The company employs about 10,000 hourly workers and 1,000 white-collar employees at its facilities in the Ontario cities of Toronto, Brampton and Windsor.

"Our members understand better than anyone the current turmoil of the domestic auto industry," CAW president Ken Lewenza said in the release. "The high acceptance of this agreement is a recognition that although workers did not cause this crisis, we all have an interest in maintaining good jobs and ensuring the auto industry remains central to the overall Canadian economy."

After a week of tense negotiations, the CAW announced Friday night that it had reached a tentative deal that will save the automaker $240 million a year.

"We provided what we believe is the best possible security for our members even though that gun pointed at our head was something we had to deal with," Lewenza said Friday.

The deal preserves workers' base wages and pensions, but cuts some of their benefits, including some health coverage, as well as tuition and car-purchase rebates.

It will achieve savings equivalent to the reduction of $19 an hour in labour costs that Chrysler was demanding, Lewenza said.

Governments give Chrysler an April 30 deadline

Chrysler LLC has until April 30 to negotiate an alliance with the Italian automaker Fiat and also to reach deals with its American workers and its bondholders to qualify for U.S. and Canadian government loans.

On Sunday night, the United Auto Workers union said it had reached a deal with the company.

Without a restructuring plan that the governments find acceptable, Chrysler would likely file for bankruptcy protection or even liquidate its assets.

Lewenza said Chrysler told him it plans to split into two parts if it files for bankruptcy protection: one that will continue to operate with the help of an alliance with Fiat and another that will liquidate its assets.

He said he has been assured that all of Chrysler's Canadian plants will continue to operate under such a scenario.

Chrysler also guaranteed the CAW that it will not ask for further concessions if it finds itself in bankruptcy court.

The Chrysler-CAW deal is the second cost-cutting agreement reached between the union and the company in less than a year, the union said.

It will be the basis for negotiating new agreements with General Motors Corp. and Ford Motor Co., Lewenza said. No dates have been set for opening negotiations with either of the other two companies, the union said.

Workers at GM accepted a deal last month in which they didn't have to give up as much, but the CAW said Saturday it will have to go back to those workers and ask them to give up more.