Retirees' pensions at stake in the next week, union economist says
May 07, 2009 - 04:29 PM
By Melissa Mancini
OSHAWA -- The Canadian Auto Workers union has a new deadline.
May 15.
That's the day the federal and provincial governments have mandated the union must have a new deal with General Motors. The deal must be cost competitive with non-union Toyota Canada plants, CAW president Ken Lewenza said.
"The governments both gave us an ultimatum, an ultimatum it was," he said.
Mr. Lewenza said the governments told the union that if it and the company reach a new deal, they will support GM through its restructuring.
"If we don't get a deal, and here's the ultimatum: the governments will provide no financial support and GM Canada will be liquidated."
He said it seems likely GM will have to file for Chapter 11 bankruptcy in the U.S. and a Companies' Creditors Arrangement Act (CCAA) filing in Canada.
The governments told the union the new agreement must compete with Toyota's Canadian operations, Mr. Lewenza said.
Toyota Canada has virtually no retirees since it only started building cars in Canada in 1987, union economist Jim Stanford said.
"Even someone who started on that day is most likely still some years away from retiring," he said.
Once the Oshawa truck plant and Windsor transmission plants close, GM will have approximately one active member for every five retirees. Chrysler has one active member for every 1.5 retirees, Mr. Stanford said.
GM is also in a unique situation because it has not had to fund its pension plan to the same degree other companies have because of special government regulations, he said.
"That's what's so infuriating about this situation and where our pensioners have to know that the security of their retirement is at stake in the next week depending on how that target of matching Toyota's costs is interpreted and we will have to work on that with the company and the government over the next few days," he said.
Mr. Lewenza said the union will not turn its back on retirees to cut costs.
"Our plants will be fully competitive right now, we'll match Toyota in total cost by dumping 25,000 people (retirees) which helped make Canada great," Mr. Lewenza said. "Is that what the government wants when they tell us to equalize our costs with Toyota? I surely hope not, because it's not going to happen."
Mr. Lewenza said he expects GM will try to raise the truck plant and Windsor plant closing agreements that were negotiated last year at the bargaining table but the union has no intentions of changing them.
The union expects to start bargaining on Sunday. This is the third time CAW and GM have gone to the table in the past year.
Local 222 president Chris Buckley said he was asking union membership to have faith in the union during this difficult time.
"We've bargained three times now in the last 12 months and every time we've asked our members to alter the collective agreement, they've done so knowing the seriousness of the industry, but again our members didn't create this crisis," he said.
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