CAW Union Votes Today on GM Accord That Pays New Workers Less

[Omaha Steve]

http://www.bloomberg.com/apps/news?pid=20601103&sid=aoWGmuTW0oGE&refer=us

By Katie Merx

May 25 (Bloomberg) -- The Canadian Auto Workers union has scheduled a vote for members to ratify a tentative labor accord with General Motors Corp. today that reduces starting pay for new hires to save money and preserve jobs.

Employees will start at 70 percent of the full wage and grow into it over six years, the union said in the highlights of a new labor accord it is providing to GM workers over the weekend. The current hourly wage is about C$34 ($30) for production workers and C$40 for skilled trades, Shannon Devine, a CAW spokeswoman, said in an e-mail.

GM, the largest U.S. automaker, wants to get labor contracts amended before a probable June 1 bankruptcy so that a court-managed restructuring can proceed quickly. Many bondholders have said they will reject a proposal tomorrow to exchange $27 billion in debt for equity.

There was a “gun to our heads,” CAW President Ken Lewenza and Bargaining Chairman Chris Buckley said in a letter to members, referring to the possible loss of 9,000 members’ jobs and 61 percent of pension benefits for 25,000 retirees. “But we responded in a principled, pragmatic manner,” they said in the letter, included in the highlights.

The new agreement preserves wages, pensions and “most core benefits,” the union leaders said. Workers give up one week of “scheduled paid absence” and pay more for prescription drugs, the union said. Leaders said they will negotiate a well-funded health-care trust.

Aid At Stake

Approval of the deal positions the automaker to receive the unspecified Canadian government aid the CAW said was necessary to keep GM Canada from being liquidated. The ratification vote comes a day before United Auto Workers leaders meet in Detroit to learn the details of a tentative accord in the U.S.

FULL story at link.

[Tim01]

1. Looks like the Canadians will be smart enough to avoid bankrupcy.

Good for them. Us, not so much.