Industry Minister Tony Clement says the Canadian Auto Workers must make more concessions to help GM and Chrysler cut costs -- but the union is refusing to budge any further.
Clement said the CAW's refusal is a problem because in the U.S. the White House has signalled that more concessions are needed from the United Auto Workers.
"If that goal post moves (then) if we're going to be competitive in a Canadian sense with the Americans... our goal posts have to move as well," Clement told CTV's Canada AM on Tuesday.
Clement said the overall situation facing General Motors and Chrysler is "troubling and dire."
"We want to give it one last shot at turning this ship around and getting to a better place," he said.
On Monday, the U.S. and Canadian governments said GM and Chrysler had not submitted restructuring plans that properly warranted more government aid.
As a result, Chrysler has been given 30 days to work out a viable contract with the Canadian Auto Workers and organize a deal with Italian automaker Fiat SpA.
GM has 60 days to revise its plan to include serious cuts to labour and other costs.
Both governments have given the companies money to keep them operating in the interim.
"This is basically a drip feed designed to keep them going until the deadline," Clement said.
On Monday, CAW president Ken Lewenza said that his union will not reopen its contract with General Motors.
He said reopening the recently completed contract, which featured a number of concessions, won't solve the problems facing the beleaguered industry.
For his part, GM CEO Fritz Henderson said the new contract with the CAW is competitive and would not commit to asking the union to reopen negotiations for further concessions.
"We're going to evaluate that (agreement) relative to what the Canadian government has said and proceed accordingly but we haven't made any conclusions in that sense yet," Henderson said Tuesday at a press conference in Detroit.
Henderson said the new agreement lowers operating and legacy costs and makes the company's Canadian plants competitive with its U.S. counterparts, as well as with non-unionized plants.
He also said despite fears that GM will cut costs by shutting down its Canadian operations, the company will continue to manufacture cars north of the border.
"It's a commitment we would willingly make, because in fact this has been a great operation for us," he said.
Lewenza said that his union will continue bargaining with Chrysler Canada and said that CAW approves of the possibility of a Chrysler-Fiat merger.
GM employs about 12,000 people in Canada, and Chrysler, about 9,400. Tens of thousands of other jobs are directly built around the auto sector.
With files from The Associated Press
