Oshawa GM workers weigh-in on strike in the U.S. – Global News

Oshawa GM workers weigh-in on strike in the U.S. - Global News
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.

About 2,200 workers at GM’s Oshawa assembly plant build the Chevrolet Impala and models of the Chevrolet Silverado and GMC Sierra. At the St. Catharines engine and transmission operations, about 1,100 employees make V6 and V8 engines and GF6 transmissions. Those engines are shipped to about 10 different GM assembly plants across North America. The CAMI Assembly plant in Ingersoll builds the Chevrolet Equinox with about 2,400 employees.

GM strike in U.S. could lead to thousands of auto layoffs in Canada

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.

The UAW is fighting over jobs and benefits, including better health care and the length of time it takes for shorter-tenured members to get top-scale pay. The strike could cost GM about US$50 million a day in earnings before interest and taxes due to lost production, Dan Levy, an analyst at Credit Suisse, said Sunday. Shares in the Detroit-based company fell about 3 per cent on Monday.

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

“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.”

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.

“One day, two days, you can readjust your production schedules, you can bounce around your operations; three days, four days, it starts affecting people’s shifts,” Volpe said. “This is why we’ll probably see a resolution today. On both sides there is just way too much at stake to carry into day two.”

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.

“We remain hopeful for a quick resolution,” Scott Worden, a spokesman for Aurora, Ontario-based Magna, said in an emailed statement. “Although Magna supplies GM on a number of programs globally, it would be premature to comment on the potential impact to our operations right now.”

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.

Rob Wildeboer, co-founder and chairman of Vaughan, Ontario-based Martinrea, said in an email that any production affected would likely be made up later and Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, is optimistic a resolution will come soon.

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

“GM workers in the U.S. are mad as hell, just like GM workers in Canada,” Dias said. “For way too long we’ve been losing our jobs to Mexico where GM candidly exploits their employees. There’s frustration with GM on both sides of the border.”

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.

If the strike lasts to the end of the month it would take only 0.1 per cent off annualized U.S. GDP growth in the third quarter, according to economists at Canadian Imperial Bank of Commerce. Sales would continue from existing dealer and wholesale inventories.

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.

Jennifer Wright, a spokeswoman for GM Canada, said there’s been no impact on Canadian operations, but the company is monitoring the situation closely. GM Canada has about 5,700 hourly employees at three manufacturing plants in Ontario.

“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.”

“There will be temporary layoffs in all three facilities as the parts start to dry up,” Dias said in a phone interview. “It could hit about a couple of thousand jobs.”

“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.”

Linamar didn’t immediately respond to a request for comment. Magna shares were little changed in Toronto trade while Linamar and Martinrea rose.

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.

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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.

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

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

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.

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

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.

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.

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

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.

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.

"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."

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.

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.

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.

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.

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