March 12 (Bloomberg) -- Chrysler LLC, the third-largest U.S. automaker, asked the Canadian government for a $2.3 billion (C$2.96 billion) loan as it also seeks larger wage concessions from union workers.

The company wants Ontario-based employees represented by the Canadian Auto Workers to provide greater givebacks than those in a recent union agreement with General Motors Corp., Chrysler Vice Chairman Tom LaSorda told Canada’s House of Commons automotive subcommittee in Ottawa yesterday.

“The current agreement with GM is unacceptable to us, and we have to break the pattern,” LaSorda said. “Chrysler LLC cannot afford to manufacture products in a jurisdiction that is uncompetitive.”

Chrysler’s push in Canada for government aid and savings from union workers mirrors efforts in the U.S., where the Auburn Hills, Michigan-based automaker has received $4 billion in federal loans and is seeking $5 billion more. Chrysler and GM are surviving on government assistance as U.S. auto sales plunge.

The CAW has said a tentative agreement with GM to freeze wages and pensions until 2012 sets a pattern for negotiations with Chrysler and Ford Motor Co. Chrysler said its labor costs are C$20 an hour more than those at Honda Motor Co. and Toyota Motor Corp. factories.

Chrysler may move operations from Canada to a recently closed minivan plant near St. Louis if needed to be competitive, LaSorda told the House of Commons panel.

‘Disruptive’ Comments

LaSorda’s comments “were disruptive,” CAW President Ken Lewenza said in an interview today. “I’m not at all surprised that Chrysler has said they can’t accept the pattern. But I don’t expect them to believe in any way that they can use this global financial crisis to break the concept of pattern bargaining.”

Chrysler’s demands are to be expected given the auto market, Canadian Industry Minister Tony Clement said in a CTV interview.

“We’re in a place where they cannot compete and they cannot succeed,” Clement said. “He’s more or less stating the obvious in a bit of apocalyptic terms but in accurate terms too.”

Asked later if Chrysler’s requests change the government’s view about aid to the firm, Clement said “this doesn’t change anything -- we’re going to be relentless in our review.” Speaking outside Parliament in Ottawa, Clement told reporters “we’re going to stick to our plan.”

In Ontario, Chrysler makes minivans at a Windsor plant and Dodge Charger, Dodge Challenger and Chrysler 300 cars at a Brampton factory. The Canadian-made vehicles account for 32 percent of Chrysler’s U.S. sales this year. The company also has a metal casting plant in Toronto.

Concessions

Ford employees in the U.S. represented by the United Auto Workers union this week ratified changes to their contract that the automaker said will save it $500 million annually.

GM may save twice that amount through concessions under a tentative accord with the UAW announced Feb. 17, people familiar with the agreement said yesterday.

Chrysler also has a tentative agreement with the U.S. union and hasn’t said how much it expects to save. Cerberus Capital Management LP owns 80.1 percent of the automaker.

To contact the reporters on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net; Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net

Last Updated: March 12, 2009 16:16 EDT