Canadian Auto Workers economist Jim Stanford says the union is anticipating a possible controlled bankruptcy for Chrysler, as labour negotiations are set to resume Monday.
Speaking to CTV's Question Period, Stanford said the CAW has likely done all it can to cut labour costs, while investors have yet to make any concessions.
"The people who really have drawn a line in the sand is not the union -- we aren't the villains here -- it's the bondholders and the other investors in the company, most of them in the U.S., who have yet to give up a cent," said Stanford.
"Our union has negotiated two cost-savings measures within 10 months. But the bond holders haven't given up anything. That's ultimately why both companies now, according to most analysts, will likely end up in court protection in the U.S., and that may or may not involve court protection in Canada as well."
Stanford said the CAW is committed to making Canada a desirable place for automakers to produce their products, as it resumes negotiations this week.
"Our goal has been to retain and reaffirm the investment advantage in Canadian plants," he said.
"Our costs per hour are lower than they are in the U.S., and that has been true for years. Our productivity is higher and it's not an accident, in Chrysler's case, that their two Canadian plants have cutting-edge technology."
Fiat Group CEO Sergio Marchionne, whose company is in talks to take a minority share of Chrysler, has said he will walk away from any deal if CAW does not make further cuts to labour costs.
He said labour costs are actually higher in Canada than in Germany or Japan.
Last week, Marchionne said the CAW should cut its compensation package by $19 an hour. That would reduce wages to $55 an hour, which includes the cost of pensions and benefits for thousands of retired workers. The actual money autoworkers receive is much lower.
A deal between the CAW and Chrysler must be reached by April 30.
