Deadline passes with no deal between CAW, GM

A government-imposed midnight deadline passed Friday with no deal reached between the Canadian Auto Workers union and General Motors Canada.

Both sides said progress was being made but more time was needed.

"We still have a lot of work to do," CAW president Ken Lewenza said in a phone interview late Friday during a break from the late-night talks.

"Bargaining is unpredictable but there has been a lot of effort put in to get the job done."

The main obstacle, Lewenza said, was that General Motors continued to demand more than its unionized employees were prepared to give and refused to recognize the sacrifices workers made earlier this year.

"They're being overzealous," Lewenza said. "That just cannot happen."

A GM Canada spokesman wouldn't comment on details of the negotiations, but said there was "lots of hard work going on."

Earlier Friday, Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty said both sides must be prepared to give in order to resolve the situation.

The two sides had until midnight to come to a new agreement on concessions aimed at cutting labour costs to help GM save money. A June 1 deadline looms over the company to present its restructuring plans to government.

"Our message has been clear throughout this entire period to all stakeholders," said Harper, "and we're not just talking about unions. We're talking about management, we're talking about bondholders and financial institutions."

Added McGuinty, "The participation of the taxpayers of Canada is dependent upon all of the stakeholders making the difficult decision necessary to ensure the viability of the company."

"There's much at risk here, and I think that our response — given how much is at risk — has to be proportional in nature, which means we're all going to have to dig deep if we're going to make a go of this."

If there is no deal, the federal and Ontario government won't provide financial support and GM Canada will be liquidated, said Lewenza.

In February, GM asked for $6 billion in loans from the two governments.

"It is the most painful set of negotiations I have been participating in my 22-year career as an elected union official," union member Chris Buckley told CBC News.

GM Canada is drawing $500 million out of the emergency fund promised by the federal and Ontario governments as it works to complete its restructuring plan.

Bankruptcy possible

General Motors Corp. chief executive Fritz Henderson has confirmed the company is considering filing for bankruptcy.

The company is still holding out hope that it can restructure without court protection and is looking at its operations country by country, Henderson said.

Lewenza has said the governments want the union to make concessions similar to those they gave Chrysler.

The CAW and GM Canada initially worked out a new labour deal in March that cut labour costs by about $7 an hour per worker, but the deal between Chrysler and the union reduced the hourly costs by about $19 an hour.

The governments promised $4 billion in emergency aid in December to help keep GM and Chrysler afloat. But after GM's initial plan was rejected in March, the company was asked to do more to prove it can continue operating competitively.

Plant closures

GM Canada had employed about 12,000 people in Canada. About 10,300 hourly workers were in southern Ontario at car and truck plants in Oshawa, a transmission plant in Windsor and an engine plant in St. Catharines. It also operates the GM-Suzuki joint-venture CAMI plant in Ingersoll.

The truck plant in Oshawa closed on Thursday, while the Windsor transmission plant will close next year.

General Motors Canada plans to reduce its workforce by more than half by 2014.

"It's rough," said Brian McCarthy who had worked for 22 years at the Oshawa plant. "It's hard to deal with. I'm 50 years old, myself, and it's going to be hard to go out and find a job."

The union has said the governments' main issue focuses on GM Canada's so-called legacy costs such as pension obligations.

Ontario Premier Dalton McGuinty has said there isn't enough money to cover GM pensions if the company goes under.

But McGuinty said he remains hopeful all sides can come to an agreement.

Governments, along with GM, the union and the creditors, all "understand how important it is for us to come together on this sooner rather than later," McGuinty said.

The premier has also vowed to fight to keep at least 20 per cent of GM's production in the province, though the production levels are still under negotiation as part of the aid package.