TORONTO (AP) -- Canadian Auto Workers negotiators have reached a tentative new labor deal with Chrysler, a union official said Friday.
The deal would save Chrysler about $240 million Canadian ($198 million) a year, CAW President Ken Lewenza said. Chrysler had agreed the cuts amounted to the $19 an hour in savings it was seeking, he added.
Chrysler has until April 30 to reach deals with its unions in Canada and the U.S. and it must cement a technology-sharing alliance with Fiat SpA. It also needs to provide a restructuring plan to governments in both countries that will enable it to qualify for government loans to keep it afloat.
Chrysler and the Canadian government told the CAW that it wanted concessions from the union that would make the labor costs competitive with non-unionized Toyota in Canada. Lewenza said that has been accomplished.
"This agreement meets the benchmark that was set by the federal government to guide our bargaining," Lewenza said.
"Some of it comes from reduced compensation, some of it comes from lower legacy costs, some of it comes from increased productivity and efficiencies in the workplace."
Chrysler employs 8,500 Canadian Auto Workers. A ratification vote is scheduled this weekend at Chrysler's three Ontario plants.
Lewenza said Chrysler told him the deal could be a significant factor in Chrysler's efforts to avoid a bankruptcy filing. He said even if Chrysler does declare bankruptcy in the U.S. and Canada, the deal should hold up.
"We are very confident that our workers won't be asked to give more," Lewenza said.
Chrysler President Tom LaSorda and Al Iacobelli, Chrysler's chief bargainer and Vice President of Employee Relations, said in statements that they appreciated the concessions made by the CAW.
"The forthright discussions and final decisions made by the CAW not only benefit the Canadian represented employees, but help to ensure the Company's future competitiveness," Iacobelli said. "The tentative agreement also helps move the Company one step closer to a partnership with Fiat SpA."
The Canadian government and Ontario provincial government have already given Chrysler Canada $750 million Canadian of a $1 billion loan and have promised further support if a viable plan is put forward by April 30.
The Canadian government has said Chrysler and General Motors must present plans that maintain the 20 percent Canadian share of production. The auto industry directly employs over 150,000 Canadians plus another 340,000 Canadians indirectly.
(Copyright 2009 by The Associated Press. All Rights Reserved.)