CAW extends final deadline
Union last holdout standing between airline, bailout package
RICK WESTHEAD
BUSINESS REPORTER
Air Canada’s showdown with the union representing its customer-service employees has been extended to this afternoon after the CAW received a new proposal on pay cuts this morning.
The union expects to meet with airline officials later today to issue their final decision on concessions.
Beginning at about 8:10 a.m., Canadian Auto Workers president Buzz Hargrove and the union’s bargaining team met for about 15 minutes with three Air Canada officials. The CAW then met behind closed doors for about three hours to review the carrier’s latest offer.
The union had expected to make a decision by noon.
“We were hoping to review the offer and get back to you, but it’s more complicated than we expected,” Hargrove said.
A press conference has been tentatively scheduled for 4 p.m.
While Air Canada has won about $150 million worth of pay and benefits concessions from its other unions, the CAW has refused to agree to cuts worth $50 million a year. It says that amounts to a $10,000 annual pay cut for each of its members.
The 5,900 CAW members make an average $40,000 a year, a union official said.
Yesterday, Hargrove said union officials would receive Air Canada's last offer today, "look at it, and it'll be a yes or a no."
Insolvent Air Canada missed a deadline of midnight Saturday to convince all its unions to agree to the concessions.
Frankfurt-based Deutsche Bank, which has pledged to guarantee a sale of $850 million worth of stock in a reorganized Air Canada to its creditors, had threatened it would abandon its plan if a deal wasn’t reached this past weekend.
But a source close to Deutsche Bank said it probably won't abandon its plan, as long as Air Canada officials feel they're making progress with the CAW. A bank spokesperson declined to comment yesterday.
If Deutsche Bank quashes its agreement, Air Canada creditors might push the airline into receivership. Similarly, if there doesn’t seem to be any prospect of finding an alternative to the German bank, Air Canada’s board might decide to recommend liquidating the company.
Last month, Hong Kong financier Victor Li quit his plan to invest $650 million in Air Canada in exchange for a 31 per cent ownership stake after unions refused to agree to his cost-cutting proposals.
Union last holdout standing between airline, bailout package
RICK WESTHEAD
BUSINESS REPORTER
Air Canada’s showdown with the union representing its customer-service employees has been extended to this afternoon after the CAW received a new proposal on pay cuts this morning.
The union expects to meet with airline officials later today to issue their final decision on concessions.
Beginning at about 8:10 a.m., Canadian Auto Workers president Buzz Hargrove and the union’s bargaining team met for about 15 minutes with three Air Canada officials. The CAW then met behind closed doors for about three hours to review the carrier’s latest offer.
The union had expected to make a decision by noon.
“We were hoping to review the offer and get back to you, but it’s more complicated than we expected,” Hargrove said.
A press conference has been tentatively scheduled for 4 p.m.
While Air Canada has won about $150 million worth of pay and benefits concessions from its other unions, the CAW has refused to agree to cuts worth $50 million a year. It says that amounts to a $10,000 annual pay cut for each of its members.
The 5,900 CAW members make an average $40,000 a year, a union official said.
Yesterday, Hargrove said union officials would receive Air Canada's last offer today, "look at it, and it'll be a yes or a no."
Insolvent Air Canada missed a deadline of midnight Saturday to convince all its unions to agree to the concessions.
Frankfurt-based Deutsche Bank, which has pledged to guarantee a sale of $850 million worth of stock in a reorganized Air Canada to its creditors, had threatened it would abandon its plan if a deal wasn’t reached this past weekend.
But a source close to Deutsche Bank said it probably won't abandon its plan, as long as Air Canada officials feel they're making progress with the CAW. A bank spokesperson declined to comment yesterday.
If Deutsche Bank quashes its agreement, Air Canada creditors might push the airline into receivership. Similarly, if there doesn’t seem to be any prospect of finding an alternative to the German bank, Air Canada’s board might decide to recommend liquidating the company.
Last month, Hong Kong financier Victor Li quit his plan to invest $650 million in Air Canada in exchange for a 31 per cent ownership stake after unions refused to agree to his cost-cutting proposals.