Canada’s industry minister wants a clear indication this week on the future of Chrysler’s local operations, which include two vehicle assembly plants in Ontario.
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Tony Clement told Dow Jones the government needed to know whether Chrysler was on the path of “plan A or plan B” [taxpayer funded rescue or bankruptcy protection] but wouldn’t say which option was more likely, describing it as a “very fluid” situation.
“We have stressed to both sides that we really need some clarity on the situation this week,” Clement said in Ottawa.
Chrysler Canada and the Canadian Auto Workers (CAW) union met again on Monday for further talks on pay cuts, ahead of the 30 April deadline for the company to come up with a restructuring plan that could qualify for government aid.
First Fiat chief executive Sergio Marchionne said early last week his company would abandon a plan to take a stake in Chrysler unless both the CAW and the United Auto Workers agreed to trim hourly labour costs.
That was followed a day later by Clement saying Chrysler’s workers in Canada needed to trim hourly labour costs by C$19 an hour, to $57.
Over the weekend, Chrysler chairman Robert Nardelli and vice-chairman Tom LaSorda took the extraordinary step of issuing a letter directly to employees of the Canadian unit urging them to agree to give up benefits worth C$8.24 an hour.
Clement described the Monday Chrysler-CAW meeting as a “positive sign” and said he hoped for a resolution, Dow Jones reported.
He said taxpayers weren’t “interested in a union protecting its entitlements that have been garnered over a period of time”, adding that Chrysler’s costs have to be competitive with Toyota and Honda [which both have plants in Ontario].
He added that Chrysler, the union, bondholders and suppliers all have to be “at the table”.
“This is a Rubik’s cube where all of the sides have to be in line for this to work. It’s complex, but I still think it’s possible,” he said.
