CAW Agrees to Cost-Cutting Measures at GM

You probably saw in the papers today that the Canadian Auto Workers reached a mid-contract agreement with GM to slash some costs and freeze other entitlements, a deal that was made necessary by conditions imposed on GM as part of the Federal government’s ‘bailout’ plan for the auto industry.  The deal apparently extends a wage freeze an extra year to September 2012, as well as Cost-of-living increases, plus it adds a user fee service for some benefits.  In exchange, and in addition to the expectation that this deal will lead to a cash injection from the government, GM has agreed that production on certain cars and transmissions will remain in Oshawa and St. Catherines for a few more years at least.
The workers still need to ratify the deal.  We noted earlier that the labour costs in Canada amount to only 7% of the cost of a car, according to the CAW’s numbers.  We’ll have to see then whether these costs make a difference in turning around GM’s fortunes.  Certainly it sounds like the government payments will buy GM some time in any event.
By the way, for my employment law students, note that the employer needed to bargain these changes to employment conditions with the union. Could GM unilaterally impose these sorts of cuts to an employment contract for non-union employees?