GM Threatens To Liquidate Canadian Operations

TheGMSource - What do you do if your GM and your starring bankruptcy in the face? You approach your Union leaders in the CAW and ask for concessions. If your the CAW you reach an agreement just ratified last month giving GM what they want: More concessions.

Today though we're being told GM has once more went back to the CAW with a new ultimatium: More concessions or we liquidate our Canadian operations.

That's what the CAW's claiming GM has said. Both GM and Canadian representatives called the CAW to a meeting this morning. According to CAW President Ken Lewenza he was told that the CAW must go back to the table and give GM more. According to him, if no agreement is reached between GM and the CAW then "there will be no financial support for GM by Canadian governments and "Canadian operations will be liquidated."

http://detnews.com/article/20090507/AUTO01/905070453/1361/Canadian-Auto-Workers-threatened-with-GM-liquidation

bye-bye camaro?

bye-bye camaro?

GM knows they'll get what they want from the CAW. There just planting the seed of 'if you are stupid enough not to do it..then this is what you'll face.'

lets hope so.

If GM liquidates their Canadian Operations that means no more contract with the CAW which may mean they can move Camaro production elsewhere. Although, a lawyer would probably need to confirm that.

If GM liquidated Canadian Operations and it could free up name-to-location-binding-contracts, that would free up a LOT more than the Camaro...

that would free up a LOT more than the Camaro...

Like what then?

Like what then? impalas.

I know about Impala and Camaro, nearly everybody does but the person said "a LOT more then Camaro..."

One name like Impala would not be "a LOT more" so I'm curious what else there would be that would be free'd up.

I had mentioned in another thread that it would be interesting if GM ripped up the parts of the contracts that had names dedicated for certain sites. I was rebuffed that the bankruptcy would not affect GM canada, which didn't make sense. Glad to see i was apparently right.

I wouldn't be surprised if this is one of the concessions GM demands. How can they make their best plan if their hands are tied in where they can build certain vehicles?

The CAW has re-openned their contracts 3 times in the last 3 years and many employees are pissed.

So if your name is Ken Lewenza and you just gave Chrysler Canada $19/hr worth of concessions and now the government and GM want the same deal, (after Fritz Henderson said the previous deal was good enough), this is the only way in hell you'll EVER get the caw members to vote in favor of a new agreement.

It's funny how they threaten with liquidation of GM Canada when in fact Chrysler Canada hasn't filed for bankruptcy and GM's oshawa plants are the most productive in North America.

The ONLY reason GM Canada would file bankruptcy is to make or "force" changes to their hugely underfunded pension plan.

GM will get what they want.

This is a repeat of what happened with Chrysler, and GM just needs the same deal.

The unions need to go along. Since Toyota, Honda, etc., aren't raising wages+benefits to GM's levels, the UAW needs to lower theirs. The auto industry is too competitive for a company to survive while paying more money to its workers than a competitive company. Long term, the UAW/CAW's best chance is to unionize the transplants. If they don't do that, then the non-union plants will set the prevailing wage. At least that's the way it looks from a distance.

This is a repeat of what happened with Chrysler, and GM just needs the same deal.

The unions need to go along. Since Toyota, Honda, etc., aren't raising wages+benefits to GM's levels, the UAW needs to lower theirs. The auto industry is too competitive for a company to survive while paying more money to its workers than a competitive company. Long term, the UAW/CAW's best chance is to unionize the transplants. If they don't do that, then the non-union plants will set the prevailing wage. At least that's the way it looks from a distance.

Very true but what do you do about the legacy costs? GM has 5 retirees for every active worker. Chrysler has 1.5 retiree for each active worker and Toyota virtually has no legacy costs, just like Hyundai or Honda.

Obama claims that they will not go after pensions and retirees but I fail to see how we can have a levelled playing field without doing that.

I see this as turnabout, when the Union had the power they exploited it for everything they could. Unfortunately for them the shoe is really on the other foot. Where are they gonna go if GM says goodbye? They're f*cked! Unfortuantely both the Unions and GM management did this to themselves.

Back in March, GM and the CAW needed to come up with a cost saving agreement in order to qualify for more government money. In my opinion, they didn't do the aggressive cutting that needed to be done to actually make the company viable, they just made a small token reduction in order to appear as if they actually accomplished something. Luckily, the Canadian government didn't bite and told them to go back and come up with something realistic. Chrysler had the balls (or the desperate circumstances) to actually do the real deal, and now GM wants in on that action.

If GM liquidated Canadian Operations and it could free up name-to-location-binding-contracts, that would free up a LOT more than the Camaro...

Not absolutely current:

http://www.gm.com/corporate/about/global_operations/north_america/cana.jsp

Very true but what do you do about the legacy costs? GM has 5 retirees for every active worker. Chrysler has 1.5 retiree for each active worker and Toyota virtually has no legacy costs, just like Hyundai or Honda.

Obama claims that they will not go after pensions and retirees but I fail to see how we can have a levelled playing field without doing that.

After the bankruptcy, any money for pensions and health care will come from selling GM stock. It should not come out of GM's operating budget like it does now. At least I think that's what is supposed to happen.

I see this as turnabout, when the Union had the power they exploited it for everything they could. Unfortunately for them the shoe is really on the other foot. Where are they gonna go if GM says goodbye? They're f*cked! Unfortuantely both the Unions and GM management did this to themselves.

I'd agree with you had GM not made money in Canada. GM's Canadian plants were profitable right up until 2007.

GM stopped reporting how much money they made in Canada because the union was using it as a bargaining tool, just like they're using productivity as a bargaining tool as well.

From 2000 to 2007, GM aledgedly made 60% of their profits out of their Canadian operations while only producing 25% of GM's products. The huge losses after 2003 would
have been much worst had it not been for the money they made in Canada or GMAC. We could argue that GM could have gone bankrupt 5 or 6 years ago if the US losses had not been offset by other profitable ventures such as GM Canada, GMAC, etc.

With all the money that both levels of government have thrown at GM for the Beacon projects among other things which was supposed to keep a work force of 12,000+ employees, it looks like everybody is getting a raw deal.

After the bankruptcy, any money for pensions and health care will come from selling GM stock. It should not come out of GM's operating budget like it does now. At least I think that's what is supposed to happen.

GM Canada is different. They have a pension plan which is 5 billions in the red. The CAW has not and will not buy equity in the company and it's not sure if any level of government here will buy any either.

I'd agree with you had GM not made money in Canada. GM's Canadian plants were profitable right up until 2007.

From 2000 to 2007, GM aledgedly made 60% of their profits out of their Canadian operations while only producing 25% of GM's products.

GM Canada is different. They have a pension plan which is 5 billions in the red.

And those two statements are very much linked. The government changed the pension rules for three specific companies deemed "too big to fail", such that they did not have to fully fund their pension plans. They only had to keep enough money to fund ongoing obligations, under the assumptions that they were too big to fail and thus could cover their pension obligations in perpetuity. Oddly enough, the other two companies covered by this clause, Stelco and Algoma, have both filed for bankruptcy (Stelco twice).

GM Canada is different. They have a pension plan which is 5 billions in the red. The CAW has not and will not buy equity in the company and it's not sure if any level of government here will buy any either.

Ah, right. So if GM Canada doesn't file for bankruptcy, then the obligations are still there.