GM, CAW face midnight deadline

OSHAWA, Ontario, May 15 (UPI) -- General Motors Canada and the autoworkers union faced a midnight Friday deadline to reach a cost-cutting deal, the union president said.

The federal and Ontario governments set a strict deadline for the U.S. automaker to receive billions of dollars in government loans needed to keep its Canadian operations afloat, Canadian Auto Workers President Ken Lewenza said.

"If we don't get a deal, the governments will provide no financial support, and GM Canada will be liquidated," he said.

Pension issues stymied efforts to reach a new concession deal, analysts said. GM Canada has about five retirees for every active worker. In addition, its pension shortfall is as high as $7 billion, analysts estimate.

General Motors of Canada Ltd. and the CAW agreed to a deal in March that would cut nearly $1 billion in GM retiree costs on top of additional labor savings. But the governments said the labor costs were not deep enough and ordered the two sides back to the bargaining table, telling them to create a deal comparable to what Chrysler Canada Inc. and the union reached, CTV said.

In the United States, GM is close to a deal with the United Auto Workers that would halve its remaining cash outlays for retiree health costs, The Wall Street Journal reported.

The Detroit automaker would also cut hourly labor costs by more than $1 billion a year, the newspaper said.