The Canadian Auto Workers union says it is giving General Motors Corp. until 6 p.m. Wednesday to work out a new master contract that would include a buyout package for some 1,400 workers at a Windsor, ON, Canada, transmission plant now earmarked for closing.

GM told the union of its decision Friday, announcing publicly today it would shutter the facility in second-quarter 2010, citing a lack of new product available for the plant.

“We have worked extensively with our labor and government partners but have been led to the unavoidable conclusion there are no available replacement products in the relevant timeframe for this location,” General Motors of Canada Ltd. President Arturo Elias says in a statement.

CAW President Buzz Hargrove, who earlier threatened to strike if GM did not designate new work for the facility, now says he understands the reasons the plant must be closed but will notify the auto maker of the union’s intention to strike if no buyout deal is worked out by the time the current contract expires at the end of September.

GM today rejected an incentive-package proposal for Windsor workers put together by the CAW over the weekend.

“Friday came as an incredible shock,” Hargrove says in a conference call with reporters to discuss the closing and ongoing negotiations with GM. But he says that after three years of high-level meetings, some involving GM CEO Rick Wagoner, it became obvious to both sides there wasn’t a new product that would fit at Windsor.

Studied and rejected by GM was a plan to build a new transmission plant on the outskirts of Windsor that would have employed less than half the current operation’s workers, Hargrove confirms.

“As GM’s market share continued to drop, it was clear it would be an uphill battle,” he says of trying to coax new investment out of the auto maker. “We came into the negotiations saying we would do everything possible, including strike” to get new work at Windsor.

“But at the end of the day, you do what you can to defend your members,” he says. “If we thought there was a product out there, you bet your boots we would strike. Now we may have to strike to get (an employee-separation package).”

GM has “given some indication on buyouts,” but its offer was insufficient, he says. Most of the Windsor workers are within striking distance of a pension, with a handful of the youngest workers at about 10 years seniority, Hargrove says.

“If (GM) accepted our proposal, it would cover most of the Windsor people,” he adds. “If we have our way, the membership would be treated fairly.”

If the union and GM are not close to a master agreement, including a buyout package for the Windsor workers, by the May 14 deadline, negotiations will be tabled until closer to the September contract expiration, and attention will turn to bargaining with Chrysler LLC.

Negotiations began today with Chrysler officials at the same Toronto hotel where GM bargaining has been under way since last week.

Chrysler officials “say the Ford (Motor Co. contract) is too rich, and they put forth the arguments we’ll hopefully dismantle over the next couple of days,” Hargrove says of the talks so far.

GM has agreed to some but not all of the provisions in the contract the CAW inked with Ford early this month, Hargrove says, but he declines to specify where the gaps exist.

GM’s Windsor plant builds 4T45-E 4-speed automatics for small and midsize cars produced in the U.S. and Mexico, including the Chevrolet Cobalt, Pontiac G5, Chevrolet Malibu and Saturn Vue. Last year, output totaled 784,806 units, but GM says the movement to more fuel-efficient transmissions is spelling the end to the less-sophisticated 4-speed gearboxes.

The shutdown could affect workers at GM’s St. Catharines, ON, V-6 engine and components plant, where some parts for the Windsor transmission are made. The CAW also has warned of a walkout if new product isn’t brought into the St. Catharines facility and Oshawa, ON, vehicle-assembly plant. And, unlike with Windsor, Hargrove says the union won’t be backing off those threats.

Late last month, GM cut a shift at its Oshawa fullsize-pickup plant, idling 900 workers. Oshawa also builds the Chevrolet Impala and Buick Allure and is slated to produce the new Chevrolet Camaro beginning in the ’09 model year.

“We’ve identified (future) product (at St. Catharines and Oshawa), and if they’re not going to do that, it would be a strike issue,” Hargrove says, declining to identify the products. “So we could end Wednesday with a strike deadline in September.”

Hitting on a recurrent theme, Hargrove blames the federal government for allowing foreign-based auto makers to gain market share in North America, forcing domestic manufacturers to downsize.

“This is devastating news,” he says of the transmission plant closing, noting it will mark the first time since 1963 there will be no GM manufacturing operations in Windsor.

dzoia@wardsauto.com