Toronto: Members of the Canadian Auto Workers union have voted 87% in favor of a new cost-cutting contract with General Motors.
The deal is needed to qualify the struggling automaker for Canadian government aid.
The agreement reached between the union and company last weekend includes a wage freeze to September 2012, the elimination of an annual bonus and a reduction in paid time off, among other concessions.
GM has also promised workers that Detroit-based parent General Motors Corp. will keep 20% of its total North American manufacturing volume in Canada.
CAW national president Ken Lewenza has said a key goal would be that Canada maintain its market share and that Sunday’s deal should help do that.
“These changes are difficult for our members and retirees, but CAW members at GM agree that accepting these changes is the best choice under the circumstances,” Lewenza said Wednesday.
Many workers who voted on the deal said they supported the agreement only reluctantly, calling it “painful” but “realistic.”
Without government aid from Canada and the United States, General Motors has warned it could go bankrupt.
The 10,000 workers covered by the contract held ratification votes Tuesday and Wednesday.
The union said it plans to continue its practice of pattern bargaining with the three North American automakers and said talks will begin this week with either Ford Motor Co. or Chrysler LLC.
Chrysler executives, though, have concerns that the wage freeze didn’t go far enough because it is still higher than the average pay of auto workers in the U.S., according to a person briefed on the Auburn Hills, Michigan-based automaker’s bargaining strategy.
The CAW reached a deal with Ford last May that freezes wages and cuts vacation pay but avoids changes to base wages. The CAW, though, did not allow a two-tier wage system used in the U.S. in a contract with the United Auto Workers, where new hires would be paid about half the hourly wages of older employees and get fewer benefits.
In Canada, new hires would start work at 70% of the top wage, reaching the maximum three years later.
The Ford deal eventually became the pattern for GM and Chrysler in Canada, but Chrysler officials are concerned that the costs are higher than U.S. wages, said the person, who asked not to be identified because the negotiations are private.
GM Canada is eligible for loans of up to 3 billion Canadian dollars _ or $2.3 billion in U.S. dollars _ under a government aid package. It submitted a restructuring plan last month.
Chrysler last year asked for $1 billion in bridge financing from the Canadian government.
Last week, Lewenza said the Canadian union had reviewed the United Auto Workers’ tentative concessions agreement with GM and would negotiate its terms based on that agreement.