General Motors made "significant'' profits in Canada last year and shouldn't cry poor at the bargaining table with its workers this summer, Canadian Auto Workers (CAW) president Buzz Hargrove says.

Firing the union's loudest salvo yet ahead of Big Three talks that officially kicked off this week, Hargrove told more than 1,500 CAW members at a Toronto convention that the union won't accept calls to cut growth in wages, benefits and pensions during negotiations with GM, Ford and DaimlerChrysler.

"We're going to the bargaining table to make progress. Our members have done extremely well ... and they're entitled to make gains,'' Hargrove said.

Though the CAW hasn't received specific financial data from the company, Hargrove estimates GM Canada contributed "half a billion dollars'' in cost savings to the corporation last year because its plants here are more cost efficient.

Buzz Hargrove

"General Motors operations in Canada have made an awful lot of money in the last year,'' Hargrove said.

The union leader also believes the Canadian arms of Ford and DaimlerChrysler performed "reasonably well'' in 2004.

GM's North American automotive operations made $1.2 billion US in 2004.

GM Canada (TSX:GM) spokesman Richard James said the company does not isolate its Canadian financial results publicly, but noted the corporation lost $1.1 billion US overall in the first quarter. GM has since announced plans to cut 25,000 jobs by 2008.

While rhetoric is common ahead of labour talks that occur every three years, insiders say the tone in pre-negotiations this year has been harsher than normal, with the automakers calling for concessions and the CAW adamant it shouldn't have to accept them.

"The tone of our initial discussions has been very, very hard-hitting,'' said CAW economist Jim Stanford, who will play a lead role in outlining the union's demands this summer.

"They are setting a tone to try to convince us to think there will be no forward progress and probably a backwards march.'' The union says while GM, Ford and DaimlerChrysler are looking to cut costs amid increasing market competition from Japanese rivals, they're still turning profits overall and the Canadian operations are a big reason why. GM and Ford recently reduced their 2005 profit estimates but they're still anticipating having net income, not losses, this year, the union notes.

The CAW also argues its workers can't be blamed for market share the Big Three have lost in the United States to Toyota, Honda and other offshore-based companies. The union has also bristled at suggestions DaimlerChrysler in particular wants costs at its Ontario assembly operations in line with newer Toyota and Honda factories in the U.S. and Canada. Hargrove said workers at those plants tend to get their wages increased to CAW and UAW levels to keep the unions out, and would therefore negate any cost gains the Big Three make at the bargaining table.

The CAW also said it can't control what it considers weak import restrictions that have allowed Asian-based automakers to sell millions of vehicles annually in North America while cars made at North American plants barely dent Asian markets.

The companies haven't divulged strategies, but recent DaimlerChrysler documents suggest its Canadian labour costs have jumped on average 5.8 per cent annually for the past decade and that it wants to stop that trend.

GM has said health-care costs amount to $1,500 US per vehicle made at its U.S. factories and that it needs to get those costs, as well as pension expenses, under control to compete with newer plants run by Japanese rivals.

Figures compiled by Stanford, however, suggest GM's health-care costs under Canada's taxpayer-funded system amount to only $120 US per vehicle assembled in Canada.

"This isn't a situation where the places we work aren't viable and aren't profitable. Quite the contrary. They're very viable and very profitable,'' Stanford told reporters.

"If they think we're going to start giving up stuff because they're having problems in the U.S that we didn't create and we can't solve, then there's going to be a rude awakening somewhere between now and Sept. 20,'' when current contracts expire, Stanford added.