Canadian Auto Workers members have voted to support a cost-cutting deal with General Motors as the US corporation bids to qualify for more government handouts.
On Monday workers voted by 86 per cent in favour of the deal, which cuts wages, pensions and benefits.
CAW president Ken Lewenza claimed that his members had no choice but to accept the agreement, which also stipulates that GM car assembly and parts plants in Ontario will stay open.
‘They understand the crisis in the auto industry – the vote shows that’ Mr Lewenza said.
According to the CAW, the tentative deal with GM Canada provides that the starting pay rate for new hires will be 70 per cent of the established rate, with increases of 5 per cent per year for six years.
New hires will be entitled to the same retiree health benefits, funded either through a new health-care trust or by the company.
The deal freezes pensions until 2015, eliminates semi-private hospital coverage and ends tuition assistance for workers joining after January 1 2010.
The CAW also said that a 3,600 dollar (£1,963) holiday compensation payment has been cut to offset other costs, including pensions.
Mr Lewenza explained that the agreement allows GM Canada to meet the cost benchmarks set by the federal Canadian and provincial Ontario governments – namely making cuts to become competitive with non-unionised Toyota Canada.
Mr Lewenza said that there is little doubt that GM will file for bankruptcy in the United States and said there’s a real possibility it will do so in Canada.
‘The integrity of our collective agreement will be protected,’ he vowed.