General Motors was having constructive talks with governments of Canada and the province of Ontario about future funding support, new CEO Fritz Henderson has said.
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The federal government in Ottawa has so far offered GM and Chrysler C$4bn (US$3.2bn) in short-term bridge financing though the companies want up to C$11.5bn. GM has had US$13.4bn in emergency loans from the US government and wants another US$16.6bn.
Henderson said one issue in Canada concerned the company’s pension plan.
“There are some questions about … how we handle our underfunded pension situation in Canada, so we are in dialogue … constructive dialogue and we are going to work with them to bring this matter to resolution,” he told the Canadian Broadcasting Corporation, according to Reuters.
He reportedly praised the Canadian Auto Workers (CAW) union for striking a cost saving deal with GM on 11 March that the company said would wipe nearly C$1bn of retiree-related costs off its books on top of a reduction of more than C$7 an hour for each of its circa-10,000 active Canadian unionised employees.
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By GlobalData“If I think about the deal we reached with … the CAW in terms of making us more competitive, addressing legacy costs, [it is] basically a commitment on the part of Ken [CAW president Lewenza] and his team to achieve cost parity with the competitors here in the US,” Henderson said.
GM produces almost a fifth of its vehicles in Canada and about 85% of the cars made in Canada are sold in the United States, the report noted.
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