Yesterday morning, the Canadian Auto Workers union (CAW) announced a tentative restructuring agreement with General Motors Corporation (GM), a move that clears the way for the struggling auto maker to secure loans from the Canadian government. The agreement comes a few days after GM filed its 2008 annual report in which auditors raised "substantial doubt" as to the company's future viability. Some of the major features of the tentative contract, which are "[c]ontingent on GM receiving government financial assistance and recommitting to a proportional Canadian manufacturing presence," include:
- Extending the existing CAW-GM contract (which was signed last year) to September 2012;
- Freezing base wages, suspending until 2012 quarterly cost of living adjustments, and suspending indefinitely annual cost of living adjustments to pensions;
- Diverting "special bonus payments" to help offset the cost of retiree health care benefits;
- Requiring new monthly health care co-premiums for active workers and retirees; and
- Reducing paid time off and union-sponsored programs (including training, child care facilities, wellness programs, and national coordinators) by about one-third.
The tentative agreement must be approved by a majority of the roughly 10,000 CAW members currently employed by GM in Canada, who will vote on the contract in ratification meetings scheduled on March 10 and 11 in Oshawa, St. Catharines, Windsor, and Woodstock. According to Canadian Minister of Industry Tony Clement, "These negotiations show that stakeholders realize how serious the auto industry situation is, and how important it is for everyone to come to the table and negotiate in good faith in order to fundamentally restructure the company."