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Chrysler-CAW talks continue past midnight deadline

April 23, 2009 3:01 AM

TORONTO — Negotiators for the Canadian Auto Workers and Chrysler LLC bargained through the early morning Thursday in a last-ditch effort to reach a new agreement aimed at preventing the Detroit automaker from falling into bankruptcy.

The two sides were under a federal and provincial government deadline of midnight but CAW president Ken Lewenza said talks would continue. "We're not going to get at this at this particular time," he sad. "We'll try to get 'er done tomorrow."

Lewenza said the decision to extend the talks received the support of officials with federal Industry Minister Tony Clement and Michael Bryant, Ontario's Minister of Economic Development .

"They felt pretty good that we need more time," he said. "This has been the most difficult process for our bargaining committee."

But the two sides are "determined" to get the job done.

Al Iacobelli, chief bargainer and vice-president of employee relations at Chrysler LLC, said the company "continues to work around the clock with the CAW in order to reach an agreement that meets the guidelines set before us by the Canadian government which includes immediately closing the competitive gap with Canadian transplants."

Lewenza earlier accused the company of pushing the union to "the wall" with its demands to narrow the labour cost gap with its Asian competitors. "They want to get as much savings as they possibly can," he said. "We're not there right now."

Lewenza also said talks are being "complicated" by reports that the federal and Ontario governments are in negotiations to provide bankruptcy financing for the Canadian operations of General Motors Corp. and Chrysler LLC.

"It's worrisome," Gary Parent, a member of the CAW bargaining committee, said when asked how talks at a Toronto hotel were progressing. "Things are going slow."

The two sides are under the gun to reach a deal that would reduce labour costs by $19 an hour.

The company wants to reach that goal by reducing such benefits as out-of-province health care coverage, life insurance, child care, legal services and tuition reimbursement. However, the union says savings can be achieved through changes to workplace practices, said Parent.

"We want to find savings that are the least painful to our members and retirees," he said.

The union, meanwhile, headed into a caucus meeting for an update on the discussions, said Parent.

"We're looking for a signal on whether it's worth continuing," said Parent.

Meanwhile, the odds that Italian automaker Fiat SpA will walk away from a proposed merger with the Detroit automaker are growing, say auto analysts.

"Things are getting more and more difficult," Pierluigi Bellini, a Milan-based analyst with IHS Global Insight, said Wednesday. "Fiat might walk away if they're being asked to put 20 per cent into the company regardless of what the unions negotiate. The banks are playing hardball."

Chrysler LLC's lenders, holding $6.9 billion in secured loans, submitted a proposal to the U.S. Treasury Tuesday to reduce the automaker's debt by 35 per cent in exchange for taking up to 40 per cent ownership in the company, according to media reports out of Washington.

The proposal also asks Fiat to make a cash contribution to a proposed alliance — something the Italian carmaker has repeatedly said it wouldn't do.

Chrysler has a 95-per-cent probability of filing for a Chapter 11 bankruptcy, said Michael Robinet, head of global forecasting for CSM Worldwide Inc. The company is days away from an April 30 deadline to complete a deal with Fiat, but it has yet to overcome a number of hurdles, including reaching agreements with its unions and bondholders, said Robinet.

Fiat now may be leaning more toward snapping up Chrysler assets in the event of a bankruptcy, he said. "Plan B is quickly becoming Plan A," he said.

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Chrysler-CAW talks continue past midnight deadline
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