(Reuters) - General Motors of Canada’s cost-cutting deal with the Canadian Auto Workers Union faces a major roadblock due to a pension shortfall of more than C$7 billion (US$6 billion), the Globe and Mail newspaper said on Wednesday.
Ontario government officials said the pension deficit needs to be solved as a part of the company’s restructuring process, the paper said.
The cost of saving GM’s Canadian operations may be higher than anticipated, as evident from Ontario’s participation in a C$3.8 billion program with Chrysler LLC last month, the paper quoted Ontario’s premier, Dalton McGuinty, as saying.
“We came to the table with more money than we initially anticipated we’d have to come with for Chrysler,” the paper reported McGuinty as saying.
The Ontario government’s view is that the pension shortfall cannot be isolated from the overall negotiations, as it is a major component of GM’s situation, the paper said citing a source.
(Reporting by Anurag Kotoky in Bangalore; Editing by Greg Mahlich)
$1=1.162 Canadian dollars