Canadian Auto Workers begin concession talks

DETROIT (AP) — Negotiators for Chrysler LLC and the Canadian Auto Workers union began concession talks in earnest Tuesday amid threats by the company to pull out of Canada without more givebacks and the union saying it wants Chrysler to stick to a deal it reached with General Motors Corp.

The talks began as General Motors of Canada President Arturo Elias said the company will save $1 billion in future legacy costs — mainly pension and health care payments — through its agreement with the CAW.

The company also said it will save another $1 billion annually through changes to its business model and salaried work force cost reductions.

In a letter to a parliamentary committee, Elias said the company has taken “unprecedented” steps to reduce its costs.

In addition to the $2 billion saved through restructuring and salaried and legacy cost reductions, the company says it has reduced its hourly labor cost to a level competitive with nonunionized automakers in the U.S. Elias didn’t say how much that will save the company.

But the savings don’t go far enough for Chrysler, whose vice chairman told a parliamentary committee earlier this month that the company may shut down its Canadian plants if it doesn’t get significant labor cost concessions and government aid.

Ford Motor Co. also says the GM contract doesn’t cut costs enough.

Chrysler’s labor costs in Canada work out to about $20 an hour more than automakers like Toyota Motor Corp. and Honda Motor Co., Vice Chairman Tom LaSorda told the committee.

Chrysler last week was studying how it could pull out of Canada, according to a person familiar with the company’s plans. The person did not want to be identified because the plans are not finalized.