Canada Unifor union ratifies C$554-million new investment GM deal

September 25, 2016 2:35 PM EDT

The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. Photo taken October 26. REUTERS/Rebecca Cook

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By Ethan Lou

TORONTO (Reuters) - Canada's Unifor union has ratified a deal with General Motors Co that will see C$554 million ($420.84 million) invested in local plants, the labor group said on Sunday as it prepares for related talks with Fiat Chrysler Automobiles NV.

The deal was ratified after 64.7 percent of workers voted approve it, Unifor said in an evening statement.

Unifor, which represents some 4,000 GM workers, reached the deal on Monday. The four-year deal granted job security and wage increases, but less favorable pensions than before.

GM's Canadian arm also pledged to eliminate the C$2.3-billion deficit in the pension plans for unionized workers and retirees, the union said.

The ratification is expected to affect some 16,000 Unifor workers with Fiat Chrysler Automobiles NV and Ford Motor Co, whose contracts also are up for negotiation.

Under a process called patterned bargaining, Unifor's agreement with GM will be used as a template for talks with the other companies, which are expected to agree to similar terms.

Unifor has said it will negotiate next with Fiat Chrysler, and has set a tentative strike deadline of midnight Oct. 10.

Fiat Chrysler did not immediately respond to a request for comment.

Unifor President Jerry Dias said the union will be in talks with Fiat Chrysler on Monday, and that a significant issue will be the future of the company's plant in Brampton, west of Toronto.

"We need some clarification," he told Reuters by telephone late on Sunday afternoon, before the ratification results were released. "We need some answers. We ultimately need some commitment."

Unifor has said it will ask Fiat Chrysler to upgrade an outdated paint shop at the plant, which makes the Chrysler 300 and Dodge Challenger and Charger sedans.

Dias said he does not expect talks with Fiat Chrysler to be easy, but it will be hard for the company to ignore the GM precedent.

GM spokesman Tom Wickham said in a statement the company is "pleased," and that it is working toward "potential support agreements" with federal and provincial governments to "optimize the competitiveness" of its Canadian operations.

In the GM deal, the union gave up defined-benefit pensions for new hires. Dias has said concessions were necessary. Canada's once-thriving auto industry has been losing investment to the Southern United States and lower-cost Mexico.

(Additional reporting by Jeffrey Hodgson; Editing by Bill Trott and Sandra Maler)

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