Canadian auto union warns of temporary layoffs as GM workers in U.S. go on strike – WellandTribune.ca

Canadian auto union warns of \temporary layoffs\ as GM workers in U.S. go on strike - WellandTribune.ca
U.S. strike against GM could lead to Canadian layoffs
Oshawa GM workers say they aren't surprised that thousands of GM workers walked off the job this week. Employees hope american workers actually get somewhere with this job action, after their plant is set to close later this year.

As thousands of auto workers walk out of the job in the United States — how it may impact the industry in Canada is still up in the air.

GM said Sunday it offered pay raises and $7 billion worth of U.S. factory investments resulting in 5,400 new positions, a minority of which would be filled by existing employees. GM would not give a precise number. The company also said it offered higher profit sharing, "nationally leading" health benefits and an $8,000 payment to each worker upon ratification.

The market in the U.S. is closely integrated with assembly plants like Oshawa’s. The Durham region facility relies on parts from the U.S. to do its job.

Although it’s not clear how it will affect them, workers like David Lacroix think it’s a good thing.

Kristin Dziczek, vice-president of labour and industry for the Center for Automotive Research, an industry think-tank , said the letter and resumption of contract talks are encouraging signs. "It makes me think that both sides are probably closer than it might have seemed before," she said.

“That was their bargaining chip,” says another employee. “They don’t want to hold us back, so it’s either a short strike or a long strike.”

Editorial: Blame strike on UAW corruption

The scenario is all too familiar for GM employees in Oshawa, where hundreds of workers will be out of a job in the next couple of months.

BREAKING: UAW on strike against GM, talks resume

Lacroix says they don’t blame employees for walking out — as they could suffer the same fate.

Overnight Sunday, more than 49,000 workers in the U.S. walked off the job after talks broke down in contract negotiations, bringing more than 50 factories and warehouses to a standstill. It was a drastic move by workers who are also facing the closure of four plants in the U.S.

Workers left factories and formed picket lines shortly after midnight in the dispute over a new four-year contract. The unions top negotiator said in a letter to the company that the strike could have been averted had the company made its latest offer sooner.

Avery Shenfeld, chief economist of CIBC markets, says how Canada is impacted depends on the length of the strike.

Typically, you would make up for lost time by having additional shifts and then producing as many cars as you would otherwise, Shenfeld said.

In the letter to Scott Sandefur, GMs vice-president of labour relations, Dittes wrote that the company waited too long to make the offer. GM issued a statement saying it wants to reach a deal that builds a strong future for workers and the business.

Because of the close relationship between the U.S. and Canada, the effects could be felt soon if the strike drags on.

The company pledged to build a new all-electric pickup truck at a factory in Detroit, according to a person who spoke to The Associated Press on condition of anonymity. The person was not authorized to disclose details of the negotiations.

Historically, because of just-in-time inventory processes that are now quite common, its only a matter of days before theyre missing a supply of a critical part here or there.

On Saturday, NDP Leader Jagmeet Singh said his party would help invigorate the auto industry with more funding and a new “made in Canada” procurement rule.

“That would mean investments in cities like Oshawa,” says Singh. “We also want to make sure when we’re buying with our public dollars, we make an incentive to buy made in Canada cars.”

UAW Vice-President Terry Dittes told GM that the companys latest offer might have made it possible to reach an agreement if it had not come just two hours before the unions contract with GM expired on Saturday night.

“I like any idea to be able to come to the table and help and invest in the automotive industry,” says Carter. “I’d rather see the dollars go into where we can compete in what kind of vehicles we could be producing.”

"Its not right when youre working next to someone, doing the same job and theyre making a lot more money," he said. "They should be the making the same as me. Theyve got families to support."

Earlier this year, GM announced it will maintain 300 jobs to transition the facility from making cars to part stamping and autonomous vehicle testing. The Oshawa plant is still running but is set to close its doors later this year — leaving 2,300 unionized workers out of a job.

The letter dated Sunday suggests that the company and union are not as far apart as the rhetoric leading up to the strike had indicated. Negotiations resumed Monday in Detroit after breaking off during the weekend.

As 49,000 United Auto Workers in the U.S. strike against General Motors, there's a risk the walkout could shut down GM Canada's plants and auto-parts makers in Ontario.

And that means layoffs of some of GM's 5,700 Canadian workers and others throughout the auto sector.

Workers at Fiat Chrysler and Ford continued working under contract extensions. Any agreement reached with GM will serve as a template for talks with the other two companies.

The North American auto industry is highly integrated, with assembly plants here in Canada reliant on parts coming from the U.S. and Mexico. 

"I think GM kind of sabotaged some of the negotiations by going immediately to the public," Wheaton said. "It really distorts the offer."

GM has three plants in Ontario — assembly plants in Ingersoll and Oshawa, and an engine and transmission plant in St. Catharines.

GM said Sunday it offered pay raises and $7 billion worth of U.S. factory investments resulting in 5,400 new positions, a minority of which would be filled by existing employees. GM would not give a precise number. The company also said it offered higher profit sharing, “nationally leading” health benefits and an $8,000 payment to each worker upon ratification.

Because the auto supply chain is integrated, Canadian plants could soon be unable to continue working because of a shortage of parts. GM Canada did not say how soon Canadian plants might be affected.

More than 49,000 members of the United Auto Workers went on strike against GM in the U.S. Monday, bringing more than 50 factories and parts warehouses to a standstill in the unions first walkout against the no. 1 U.S. automaker in over a decade. Workers left factories and formed picket lines shortly after midnight in the dispute over a new four-year contract.

But it could happen quickly. GM uses "just-in-time" delivery, which means hundreds of parts are moving across the border every day. 

The automaker also offered to open an electric vehicle battery plant in Lordstown, Ohio, where it has a huge factory that has already stopped making cars and will be closed. The new factory would be in addition to a proposal to make electric vehicles for a company called Workhorse, the person said.

About 80 per cent of the engines St. Catharines is building are destined for cars assembled in the U.S., says Jerry Dias, president of Canadian union Unifor. Workers there could face layoffs within days, he told CBC News.

Kristin Dziczek, vice-president of labour and industry for the Center for Automotive Research, an industry think-tank , said the letter and resumption of contract talks are encouraging signs. “It makes me think that both sides are probably closer than it might have seemed before,” she said.

At the Ingersoll assembly plant, about half the engines they put in cars come from the U.S. Dias estimates they may have to halt operations within 10 days.

“We are concerned with the potential impact the labour strike at General Motors in the U.S. may have on the companys operations in Ontario along with our integrated supply chain that delivers parts to GMs facilities in the U.S.,” Fedeli said in a statement. 

It would be about two months before auto dealerships are affected by a shortage of product, according to the parent company.

Its unclear how many workers the two plants would employ. The closures, especially of the Ohio plant, have become issues in the 2020 presidential campaign. President Donald Trump has consistently criticized the company and demanded that Lordstown be reopened.

Canadian workers are represented by a separate union, Unifor, and its contract schedule is different from the U.S. Contracts do not expire until September 2020 and September 2021.

In the letter to Scott Sandefur, GMs vice-president of labour relations, Dittes wrote that the company waited too long to make the offer. GM issued a statement saying it wants to reach a deal that builds a strong future for workers and the business.

But Unifor issued a statement on Sunday saying it "supports the UAW in negotiations for a fair contract settlement with General Motors."

"We had a dispute with GM in 2017 at the CAMI plant. We thought it would be quick, but it went on for almost a month.

But both Dziczek and Art Wheaton, an auto industry expert at the Worker Institute at Cornell University, said GM left out key details when it made part of its offer public, and working out those details could make the strike last longer.

"The issue was about General Motors' decision to build the Equinox in Mexico. That is what is taking place in the U.S. GM announced the closure of four plants. They're beefing up investment in Mexico and the workers in the U.S., like in Canada, have had enough."

The strike shut down 33 manufacturing plants in nine states across the U.S., as well as 22 parts-distribution warehouses. Its the first national strike by the union since a two-day walkout in 2007 that had little impact on the company.

GM's Oshawa assembly plant is set to close at the end of the year, one of five plants in North America that the auto giant is closing.

UAW vice-president Terry Dittes told GM that the companys latest offer might have made it possible to reach an agreement if it had not come just two hours before the unions contract with GM expired on Saturday night.

That is one of the key issues for the UAW in the U.S., which is pressing GM to schedule new models for the four U.S. plants it is closing.

GM Canadas Oshawa plant will see the vast majority of its 2,600 unionized employees laid off this year, though initial plans to close it were adjusted to save about 300 of those jobs for a parts operation.

Unifor has pressed GM Canada unsuccessfully to extend the life of the Oshawa plant, arguing the automaker made a commitment to at least 2020 when it accepted the 2008 government bailout.

GM is negotiating a shift toward more electric cars and investing heavily in automation, considered among the key trends in the auto industry.

North American car sales have boomed in the past three years, but are stagnating this year as young consumers put off owning vehicles.

But GM made $8 billion in profit in 2018 and the UAW is arguing it deserves a wage hike and better benefits to share in the good fortune.

It's not just GM plants here in Canada, but also other auto-parts makers that could be affected.

Economic Development Minister Vic Fedeli said the Ontario government is in dialogue with GM Canada about the American strike and is monitoring the situation closely.

That's one reason Flavio Volpe, president of Canada's Automotive Parts Manufacturers' Association, hopes the dispute will be quickly resolved.

The last strike by the UAW was in 2007, and it only lasted 17 hours, so there was not much impact on Canadian operations.

Before that a strike at just two major parts plants in Flint, Mich., in 1998 that lasted 54 days eventually shut down much of GM's North American operations.

A long strike could have a big impact on Canadian workers. But it might not significantly affect the Canadian and U.S. economy.

If the strike lasts to the end of September, it would take only 0.1 per cent off annualized U.S. GDP growth in the third quarter, according to CIBC economist Avery Shenfeld.

"Impacts on Canada would be even more modest. Just to give a sense of scale, in the unlikely case where the strike lasts through [the fourth quarter] in its entirety, it would subtract a more meaningful 0.7 per cent off that quarter's annualized pace in the U.S., and take a bit of a shine off Canada as well."

Susan Noakes is a senior writer and news editor with CBC News. She spent five years at newspapers in Hong Kong and has worked for the Toronto Star and Asian Wall Street Journal. At CBC, she has covered arts, science and business.

It is a priority for CBC to create a website that is accessible to all Canadians including people with visual, hearing, motor and cognitive challenges.