Unionized workers at General Motors of Canada Ltd. in Oshawa, Ont., narrowly rejected a proposal that would have allowed managers to assign mandatory overtime to employees at two car-assembly plants—a decision that George Peapples, president of GM Canada, said jeopardized thousands of jobs in Ontario. Detroit-based General Motors Corp. has said that it will close one of five North American plants making midsized cars, the products made in Oshawa, as part of a plan to cut 74,000 jobs and 21 factories by 1995. The company had sought the concession to make the Oshawa facilities more competitive. Canadian Auto Workers president Robert White said that he would meet company officials this week to discuss the issue.
CANADIAN FLIES AMERICAN
Calgary-based Canadian Airlines said that it has broken off talks with Air Canada of Montreal and will seek a strategic alliance with Texas-based American Airlines instead. In exchange for an equity investment worth up to 25 per cent of Canadian's stock, the U.S. airline would gain access to some of Canadian’s transpacific routes and supply a variety of services, including accounting and reservations. The alliance could result in between 1,500 and 2,000 layoffs at Canadian.
The Dominion Bond Rating Service issued a ratings alert on two short-term debt issues from Olympia & York Developments Ltd., the giant real estate company controlled by Toronto’s Reichmann family. In response, O&Y, the target of recent rumors that it has financial problems, announced that it will retire $800 million worth of its commercial paper—a form of corporate IOU reserved for the most creditworthy companies.
The five major Canadian banks increased their mortgage rates to levels ranging from 9.5 per cent for a one-year term, to 10.5 per cent for a five-year term. Housing analysts said that the increases could slow the recent upturn in the market.
COLT GOES BUST
Colt Manufacturing Co., the Hartford, Conn.-based gun maker whose six-shooters helped tame the American Wild West, filed for protection from its creditors in U.S. bankruptcy court. The company, which has supplied the U.S. army since 1846, fell victim to its competitors’ more innovative designs and cheaper products.
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