TORONTO - The Canadian Auto Workers union began labour negotiations with General Motors Thursday afternoon, hours after the troubled company said it may have to seek bankruptcy protection if it can't execute a major restructuring plan.
The troubled automaker (NYSE:GM) filed an annual report with the U.S. Securities and Exchange Commission revealing that auditors have raised ''substantial doubt'' about its ability to continue operations.
But CAW president Ken Lewenza said it is ''too devastating'' to think about the prospect of GM filing for bankruptcy protection and the union will go ahead with negotiations as planned with the goal of ratifying a new contract by March 15.
''We believe the quicker we get this behind us, the quicker General Motors gets its loans, the quicker the terms and conditions of the loan are done, we can turn the page and get the company back on track without the negativity that's associated with this restructuring,'' Lewenza told a press conference.
Lewenza said the economy may be in a recession, but the Canadian auto industry is in a depression that has only been exacerbated in recent days with the announcement that Chrysler will eliminate the third shift at its minivan plant in Windsor, Ont. - the last auto assembly plant in Canada to employ a third shift - costing 1,200 jobs.
This, combined with news that U.S. Steel, which counts the auto industry among its most important customers, will shut down its Hamilton operations, costing 1,500 jobs, indicates ''the bleeding is not going to stop,'' Lewenza said.
He added that it's impossible to guarantee jobs in the current economic climate, but one of the conditions of the union's negotiations with GM will be that the automaker must maintain its proportional manufacturing footprint in Canada - estimated to be about 20 per cent of U.S. manufacturing.
''This isn't about power, this isn't about flexing muscles, this is about both sides sitting down (Thursday) afternoon and coming up with an agreement that maintains the Canadian investment advantage that will allow us to continue to have jobs here in Canada.'' Lewenza said.
The CAW has committed itself to staying cost competitive with United Auto Workers plants in the U.S., although Lewenza said he doesn't expect he will have to make any concessions on wages or benefits.
GM Canada has said previously that it's in discussions with the federal and Ontario governments and the CAW about setting up a health-care plan similar to a union-owned and directed system GM's Detroit-based parent and the UAW have created in the United States.
The company has also said reducing pension costs will be an important part of the automaker's discussions with the CAW, especially since the ratio of retired to active workers is expected to balloon to five to one after GM's previously announced plant closures are completed.
GM has also said it wants wage reductions to be part of the discussions.
But Lewenza said the CAW's objective is to maintain existing pension rates and health-care benefits for its retirees, and the union has already provided $900 million in concessions to GM, Ford and Chrysler by agreeing to a three-year wage freeze last spring that expires in 2011.
Lewenza said he will treat any agreement with GM as the ''pattern'' that will be applied to negotiations with Chrysler and Ford, which he hopes to have completed by the end of March.
''If we can't get an agreement with General Motors, we'll move across to one of the other companies,'' he added.
GM and Chrysler have asked the U.S., Canadian and Ontario governments for billions of dollars in aid to stay afloat amid slumping sales.
On Feb. 17 GM submitted the restructuring plan to the Treasury Department that included laying off 47,000 workers worldwide by the end of the year.
The 47,000 jobs to be cut around the world include about 4,000 that will be cut in Canada over the next year - 2,600 at a truck plant in Oshawa, Ont., that will shut down this spring, and about 1,400 jobs with the closure of a transmission plant in Windsor next year.
