With pact, GM, union avoid strike in Canada
GENERAL Motors and a union narrowly averted a strike by Canadian workers on Tuesday with a deal that could serve as a model for preserving the country’s dwindling auto jobs.
Under a tentative pact, GM will close one of two assembly lines at its Oshawa, Ontario, plant, its largest in Canada. But the automaker agreed to rebuild another assembly line there to produce cars and trucks.
The move will bolster overall employment in Oshawa, which currently has about 5,700 total workers, including engineering and other nonunion employees. The automaker also agreed to move production of one engine from Mexico to another Ontario plant, a provision that bucks the trade trend.
The tentative deal “really turned the tide of what has happened in the auto industry in this country for over a decade”, said Jerry Dias, the leader of Canada’s Unifor, the country’s largest private sector union.
In a brief statement, GM said that the agreement would lead to “significant new product, technology and process investments” at its two Canadian factories, as well as a parts warehouse elsewhere in Ontario. The company added that it would be looking for government financing to cover some of the investment.
While the deal focuses on two production lines, it has proved a battleground for the country’s manufacturing. The cars and trucks produced in Canada, most of which are shipped to the United States, are a vital component of the country’s exports.
But the industrial heartland has been hit by the same forces re s haping manufactur ing worldwide. Last year, 2.2 million cars and trucks were made in Canada, compared with 2.6 million 10 years earlier. And since the 2008 recession, new factories have largely headed toward the US and, increasingly, Mexico.
At the outset of negotiations, the union was focused on keeping jobs in Canada, rather than on traditional issues like improving wages and benefits. GM was clear that it would not make a decision about any investments in Canada until after the negotiations concluded.
In recent years, GM has pulled back production in Canada.
The company is gone from Windsor, Ontario. Most of what was once a transmission plant there is a pile of rubble.
Unifor, the country’s largest private sector union, feared a similar future awaited Oshawa.
The Oshawa plant has two assembly lines. One, which produces the Chevrolet Equinox, is set to close. The other builds the Cadillac XTS and the Buick Regal.
A much newer GM plant in Ingersoll, Ontario, seems to have a comparatively secure future. It is the company’s main source of the Equinox, a top-selling small sport utility vehicle. That factory is covered by a separate contract that expires next year.
GM also operates a plant that produces engines and transmissions in St Catharines, Ontario.
Under the new labour pact, GM is to move some engine production to St Catharines from Mexico. The new pact also calls for wage increases. But, in a concession from Unifor, new employees at GM Canada will receive defined contribution retirement plans, rather than full pensions.
After settling with GM, Unifor will have to deal with the clouds hanging over some factories owned by Ford Motor of Canada and FCA Canada, part of Fiat Chrysler. The Canadian manufacturing operations of Honda and Toyota are not unionised.
FCA recently renovated a plant in Windsor that makes minivans, but uncertainty surrounds its former American Motors factory in the Toronto suburb of Brampton, Ontario, which produces large rearwheel-drive cars. And while there is little near-term concern about the Ford assembly plant in Oakville, Ontario, that is not the case with an aging factory in Windsor that builds large 10-cylinder engines.
Despite the settlement with GM, Canada remains a tough sell.