- The Washington Times - Friday, March 13, 2009

OTTAWA (AP) | A Chrysler official issued a grim threat to Canadian lawmakers, warning the struggling U.S. automaker may shut down its plants in Canada if it doesn’t get significant labor concessions and government aid.

Chrysler LLC cannot afford to manufacture products in a jurisdiction that is uncompetitive, relative to other jurisdictions,” President Tom LaSorda told a parliamentary committee Wednesday night.

Chrysler’s labor costs in Canada work out to about $20 an hour more than automakers like Toyota and Honda, Mr. LaSorda told the committee. “Currently, Chrysler CAW [Canadian Auto Workers] are not competitive,” he said.

The automaker also asked for about $2.3 billion from the Canadian and Ontario governments and demanded relief in a tax dispute with Ottawa.

“Failure to satisfactorily resolve these three factors will place our Canadian manufacturing operations at a significant disadvantage relative to our manufacturing operations in North America and may very well impair our ability to continue to produce,” Mr. LaSorda said.

The company has about 9,000 employees in Canada, where it operates assembly plants in Windsor and Brampton, Ontario, and a casting plant in Toronto.

Rick LaPorte, president of CAW Local 444 in Windsor, said Chrysler’s threat to pull out of Canada is a slap in the face of workers. Union officials met with Chrysler on Wednesday, but there has been no progress toward concessions and no further talks are scheduled, Mr. LaPorte said.

Ontario’s economic development minister downplayed Chrysler’s threat, saying the automaker was simply laying out its worst-case scenario.

“I know Tom LaSorda, he’s a great Canadian and he’s not somebody who wants to be known as the guy who shut down Chrysler,” Michael Bryant said Thursday. “It was a ham-fisted way of expressing the reality that, in the absence of an agreement, Chrysler’s going to face critical challenges.”

Chrysler LLC and its Canadian subsidiary have been hit particularly hard by the slump in auto sales. Chrysler’s Canadian sales were down 27 percent in February compared with a year earlier.

General Motors Canada, which has also asked for billions in government aid amid slumping sales, reached a new agreement with the CAW last weekend, providing labor cost concessions. Workers approved the deal in voting on Tuesday and Wednesday.

The contract freezes wages until 2012 and suspends cost-of-living adjustments for both wages and pensions. It also reduces paid time off by 40 hours a year, scraps an annual 1,700 Canadian dollar ($1,319) bonus and cuts company contributions to union-sponsored programs by a third.

However, the agreement does little to address health and pension costs that both Chrysler and GM say are growing at an unsustainable pace due to an increasing number of retired or laid-off workers, said Tony Faria, an auto specialist at the University of Windsor.

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