GM deal includes move of work from Mexico to St. Catharines
TORONTO — Securing hundreds of millions of dollars of investment from General Motors in its Canadian operations was worth the trade-off that Unifor made on pensions for new hires, union president Jerry Dias said Tuesday.
After a long day of bargaining, the union — which represents about 3,900 workers at GM plants in Ontario — reached a tentative agreement overnight with the automaker, averting a possible strike.
If ratified, the four-year deal, which includes wage increases, signing bonuses and lump sum payments, will see new hires start with a defined contribution pension plan rather than the hybrid plan for current employees.
Dias says making the concession was “not a difficult decision” in order to secure investments in GM’s facilities in St. Catharines, Oshawa and Woodstock.
He added that 700 temporary employees will be made permanent under the deal.
Dias would not disclose the total investment promised by GM — though Bloomberg News, citing sources, said it was $400 million in Oshawa and $120 million in St. Catharines.
There had been fears that the Oshawa facility would shut down in 2019, but Dias says the contract ensures that won’t happen.
The settlement, which will go to the union members for a ratification vote Sunday, would also see basic V6 engine production moving from Mexico to GM’s engine plant in St. Catharines — reversing an exodus of jobs to that country.
“Frankly, we created history,” Dias said in an interview Tuesday. “This is the first time that we are seeing not only a solidifying of the footprint, but real opportunities for growth. So I’m thrilled.”
Dias said the settlement bodes well for upcoming talks with Fiat Chrysler and Ford, though he would not say which company will be targeted next in the negotiations.
“If we can get an agreement with General Motors without a dispute I’m very, very comfortable that we can find a settlement with the other two,” Dias said.
Dimitry Anastakis, an auto industry expert and a professor at Trent University in Peterborough, says it appears that support from the provincial or federal governments helped ink the deal.
When asked about the negotiations, Ontario Premier Kathleen Wynne said the ministry of economic development is in talks with both General Motors and the autoworkers’ union.
“We’re very much involved and I’m thrilled that there’s a tentative agreement,” Wynne said.
“I look forward to the vote on Sunday and I’m very, very pleased that we see a bright future for the auto industry in Oshawa and across the province.”
Brad Duguid, the minister of economic development and growth, said more details about the provincial government’s role in supporting the sector will be disclosed at the “appropriate time.”
“We fully expect to be a partner in this,” Duguid said. “I expect that the province will be very keen to land this investment and make sure that GM Oshawa has a long, healthy and prosperous future.”
Anastakis said he expects that the other two members of the socalled Detroit Three will follow the pattern set by the deal with GM, as per the pattern bargaining process. There are only a handful of isolated incidents in the past where that didn’t happen, Anastakis said.
“It’s not a crazily onerous agreement in terms of the financials,” he added. “I wouldn’t be surprised if the other companies follow suit pretty quickly.”
General Motors issued a statement shortly after the deal was announced, saying the agreement will enable significant new product, technology and process investments at GM’s Oshawa, St. Catharines and Woodstock facilities.
GM added that the company will be working with government “on potential support,” and will provide details on the investment at the appropriate time.
The biggest concession that Unifor made was agreeing to move all new hires at GM to a defined contribution pension plan, instead of a hybrid plan that included some defined benefit elements.
Since that hybrid pension plan was struck in 2012, General Motors has not hired a single new worker in Canada, though that will likely like change with the new pension in place, especially in facilities like St. Catharines where 97 per cent of employees are eligible for retirement.
“The only GM employees worldwide that still had a defined benefit plan was us in Canada,” Dias said. “When you’re the last survivor, it puts added pressure on you.
“Ultimately, we weren’t going to gamble (on that),” he said. “There was no question they were planning on closing Oshawa.”
That new defined contribution pension setup will certainly come up during talks with Ford and Fiat Chrysler, which have both hired in recent years under the hybrid plan.
There was no question they were planning on closing Oshawa. JERRY DIAZ UNIFOR PRESIDENT