Canada auto workers, GM to negotiate through the night

Melissa Burden, and Michael Wayland

Canadian auto workers and General Motors Co. were bracing late Sunday for the possibility of a strike that could halt production at 11:59 p.m. Monday in at least two Canadian plants.

Unifor Local 222 members may go on strike next week at the General Motors Co. Oshawa Assembly Plant unless an agreement securing new product and investment for the plant is reached ahead of a late Monday deadline.

Talks were to continue overnight.

If a deal is not reached, union president Jerry Dias has said he would not extend the current contract for continued bargaining. A strike would send nearly 4,000 Canadian workers in the Toronto region to the picket lines, halt powertrain and vehicle production in at least two Canadian plants and potentially start a ripple effect for GM production in the U.S. that relies on those Canadian parts.

Dias has pledged the union will strike if a deal can’t be reached that includes new vehicles and investments for Canada. It’s a risky move for the union, some analysts say, but other say the union leader has no other choice.

“I’m feeling much better today than I did yesterday, but I’m still not feeling great,” Dias told the Toronto Globe and Mail on Sunday afternoon, indicating that some progress had been made. Attempts to reach Dias by The Detroit News were unsuccessful Sunday.

A Sunday night update for Unifor members said the bargaining committee had made progress in the areas of health and safety, pensions and benefits, production standards and skilled trades: “The focus now is squarely on economics and securing product.”

It said it hoped a walkout could be avoided, but union members should be ready to strike.

A strike would send 3,860 GM Canada hourly workers from the Oshawa Assembly plant, its St. Catharines Propulsion Plant and a parts distribution center in Woodstock to the picket lines. It would stop production at two plants and potentially cause a ripple effect for GM plants in the United States.

There is risk to GM, too, as it could lose valuable production at its CAMI Assembly Plant in Ingersoll, Ontario, which builds the popular Chevrolet Equniox and GMC Terrain crossovers. Workers there are covered under a separate union contract that expires next year, but St. Catharines supplies the plant with engines needed to build the crossovers. If the union decides certain parts will not be used in the plant, a shutdown could lead to lost production of 6,500 vehicles a week, according to industry forecaster LMC Automotive.

A strike also would halt engine and transmission production at the St. Catharines plant and in a short time could create issues and even shutter other engine and transmission plants in the U.S. and some assembly plants, analysts say.

“If Unifor has a play, their only play is St. Catharines,” said Joe McCabe, president and CEO of AutoForecast Solutions LLC, adding that a strike at that plant will cause the most impact for North America.

GM likely has multiple production sources for its V-6 and V-8 engines and six-speed transmissions built at St. Catharines, analysts say. The plant also builds components. The V-8s are used in the popular Silverado and Sierra pickups and the Chevy Tahoe and GMC Yukon SUVs built at GM’s Arlington Assembly Plant in Texas. The V-6s are used in the Chevy Camaro, Impala, Traverse and Equinox; GMC Terrain and Acadia; Buick Enclave; and Cadillac CTS. The Camaro and CTS are built in Lansing, as are the Traverse and Enclave.

“Nobody really wants a strike, but it’s coming down. The line has been drawn in the sand,” said Colin James, president of Unifor Local 222, which represents 2,400 hourly workers at GM’s Oshawa plant. “It’s about the future. It’s about the community. The impact it would have on the community would be devastating.

“There really is no choice.”

Unifor is pushing most for new vehicles for the Oshawa plant, a site that has seen its workforce shrink over the past decade and has no car production slated past the 2019 model year.

Unifor Local 222 members may go on strike next week at the General Motors Co. Oshawa Assembly Plant unless an agreement securing new product and investment for the plant is reached ahead of a late Monday deadline.

GM declined to comment on specifics of negotiations Sunday beyond its statement: “At GM Canada we remain focused on working with Unifor to reach a mutually beneficial and competitive new agreement.”

The automaker has said it needs to know labor costs and won’t make any announcements for Oshawa until after negotiations are settled. That has caused some to question the company’s commitment to manufacturing in Canada.

“The fact that the company will not even discuss product allocation with Oshawa ... it seems a little bit disingenuous,” said Oshawa Assembly union rep and longtime plant employee Jim Wheeler of Bowmanville, Ontario. “They’re more than willing to give the Americans and Mexicans product promises, but not us.”

This wouldn’t be the first strike for James or Wheeler. Both were part of a three-week strike of 28,000 GM workers during negotiations in 1996 — the last work stoppage for the Detroit-based automaker in Canada.

That strike forced GM to lay off nearly 20,000 GM and parts supplier workers in the U.S. and Mexico because of parts-flow disruptions. It cost the automaker $220 million, according to reports at the time.

“We’d like to retrieve a settlement without a strike,” said Wheeler, whose son also works in the Oshawa plant. “But I would say the strike in 1996 brought people together. It did more to increase the solidarity of the workforce than a lot of other things.”

Art Schwartz, president of the Ann Arbor-based consultancy Labor and Economics Associates, said “clearly a strike by Unifor won’t be as effective as it used to be,” but it would eventually have an impact.

Some analysts such as Jeff Schuster, senior vice preisdent of forecasting for LMC Automotive, say a short strike would not harm GM much, though it would feel some effects from a long-term strike.

Mike Van Boekel, CAMI plant chairman, and Dan Borthwick, president of Unifor Local 88, vowed in a letter to the CAMI plant manager earlier this month that their workers wouldn’t assemble vehicles with parts that aren’t from St. Catharines. The union refers to alternative parts GM may try to bring in from another location as “hot cargo.”

The Oshawa plant could lose 2,000 units of production a day in a strike, according to analysts. The plant builds slow-selling sedans, however. At the beginning of September, days supply of the Oshawa-built the Cadillac XTS was 38, while it was 78 for the Buick Regal and 37 for the Chevrolet Impala, according to information provided through LMC Automotive. GM also builds the Impala at its Detroit-Hamtramck Assembly Plant.

Oshawa employees also build Equinox crossovers and days supply at the beginning of September was 70, up from 40 the month before.

U.S. sales of the Equinox fell nearly 40 percent in August to 15,273 from the same month a year earlier. Terrain sales also were down 35 percent in August and days supply stood at 94 on Sept. 1, according to LMC Automotive.

GM attributes the sales drop to limited availability that began after a big July sale and because the company was not throwing as many incentives on the compact crossovers as competitors. But some believe the company may have pulled back a bit on sales of those crossovers to build inventory in anticipation of a possible strike.

Negotiations between Unifor and the Detroit automakers officially started last month. Unifor chose GM as its target company Sept. 6. It will pattern subsequent deals with Ford Motor Co. and Fiat Chrysler Automobiles NV from a potential agreement with GM.