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.
GM is going to have to make some firm commitments. Id expect that the workers in the United States arent going to accept the fact that theres a continued migration of their jobs to Mexico – thats the elephant in the room, Dias said.
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.
The United Auto Workers union said the fight for fair wages and job security are among the issues behind the strike – its first one against GM in 12 years – which could cost GM about US$50 million per day.
If the engines or transmissions St. Catharines is building are destined for cars assembled in the U.S., the plant may have to slow or stop operations. Similarly, if the assembly plants are depending on parts from the U.S., they may have to halt operations.
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 different union, Unifor, and its contract schedule is different from the U.S. Contracts do not expire until September 2020 and September 2021.
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But Unifor issued a statement on Sunday saying it "supports the UAW in negotiations for a fair contract settlement with General Motors."
"The union advocates for all working people and their rights, fights for equality and social justice in Canada and abroad, and strives to create progressive change for a better future," the statement continued.
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.
Video: UAW members walk out on GM over contract dispute
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.
Analysts at Cox Automotive said GM has enough vehicles on dealer lots to last about 77 days at the current sales pace. Thats well above the industry average of 61. But supplies of the Chevrolet Tahoe and Suburban large SUVs, which generate big money for the company, are well below the industry average.
But GM made $10.8 billion in pretax 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.
Before the talks broke off, GM offered to build a new all-electric pickup truck at a factory in Detroit that is slated to close next year, according to a person who spoke to The Associated Press on condition of anonymity. The person wasnt authorized to disclose details of the negotiations.
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That's one reason Flavio Volpe, president of Canada's Automotive Parts Manufacturers' Association, hopes the dispute will be quickly resolved.
President Donald Trump lamented the situation on Twitter — writing here we go again” — and urged both parties return to the negotiating table to make a deal. Trump had attacked GM weeks earlier for moving facilities overseas, which remains a major part of his campaign message to union and working-class voters in the industrial Midwest.
General Motors auto workers strike in US
The last strike by the UAW was in 2007, and it only lasted 17 hours, so there was not much impact on Canadian operations.
U.S. workers union starts first strike against GM in 12 years
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."
Video: Nearly 50K workers strike against General Motors
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Members of Michigans Democratic congressional delegation also weighed in, either to voice their support for striking workers or call for both sides to hammer out a new contract. Republican representatives in Congress have yet to weigh in, as of Monday morning.
Davison resident Jeff Elkins, 37 and a GM employee who works on the line, walks across Van Slyke Road proudly waving a UAW flag as General Motors employees leave the Flint Assembly Plant at midnight as part of the national strike on Sept. 16, 2019 in Flint, Michigan. (Jake May / The Flint Journal via AP)
DETROIT — A strike by over 49,000 United Auto workers against General Motors could have been averted had the company made its latest offer sooner, the unions top negotiator said in a letter to the company.
In the letter dated Sunday, UAW Vice-President Terry Dittes told GMs labour relations chief that the latest offer could have made it possible to reach an agreement and avoid the strike that shut down more than 50 GM factories and parts warehouses just after midnight on Monday.
The union's contract with GM expired Saturday night, but pacts with the company's crosstown rivals, Ford and Fiat Chrysler, were extended indefinitely. The union has picked GM as its target company this year, and any deal it negotiates will be used as a template for the others. GM was picked because it's the most profitable of the three, and because its plans to close four U.S. factories have angered union members.
Video: GM workers to strike amid contract negotiation
The letter could suggest that the company and union arent as far apart as the rhetoric leading up to the strike had indicated. Negotiations resumed in Detroit on Monday after breaking off during the weekend.
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But union spokesman Brian Rothenberg said they have come to terms on only 2% of the new four-year contract. "Weve got 98% to go," he said Monday.
In the letter to Scott Sandefur, GMs vice-president of labour relations, Dittes wrote that the company waited until just two hours before the contract expired on Saturday night to make its first serious offer. "Had we received this proposal earlier in the process, it may have been possible to reach a tentative agreement and avoid a strike," Dittes wrote.
Some 46,000 General Motors auto workers strike in US – The Jakarta Post
On Sunday, Dittes said a strike is the unions last resort but is needed because both sides are far apart in negotiating a new contract.
In the letter released by the union Monday, Dittes wrote that there are many important items left in the talks including wage increases, pay for new hires, job security, profit sharing and treatment of temporary workers.
"We are willing to meet as frequently, and for as long as it takes, to reach an agreement that treats our members fairly," Dittes wrote.
Night shift workers at an aluminum castings factory in Bedford, Ind., that makes transmission casings and other parts shut off their machines and headed for the exits, said Dave Green, a worker who transferred from the now-shuttered GM small-car factory in Lordstown, Ohio.
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.
Before the talks broke off, GM offered new products to replace work at two of four U.S. factories that it intends to close.
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 wasnt authorized to disclose details of the negotiations.
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.
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.
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.
But the union and company still are far apart on use of temporary workers and accelerating the pay raises for new hires so they reach the top of the union scale faster, she said.
Dziczek and Art Wheaton, an auto industry expert at the Worker Institute at Cornell University, say GM left out key details when it made part of its offer public, and working out those details could make the strike last longer.
Union Votes to Strike at General Motors US Plants
"I think GM kind of sabotaged some of the negotiations by going immediately to the public," Wheaton said. "It really distorts the offer."
Wheaton questioned the time frame for Lordstown to get the electric battery factory, which he said would take years to plan and build.
Early Monday, workers shut down 33 manufacturing plants in nine states across the U.S., as well as 22 parts distribution warehouses.
GM workers to go on nationwide strike for first time in 12 years
Its the first national strike by the union since a two-day walkout in 2007 that had little impact on the company.