Emily Jackson, Financial Post
September 18, 2019

General Motors Co. temporarily laid off about 1,200 employees and cut production in half at its plant in Oshawa, Ont. in response to the auto workers strike in the United States, a labour action that has disrupted North American supply chains and will, if not resolved quickly, trigger more work stoppages in Canada’s auto sector.

GM Canada sent home workers on its truck line Tuesday afternoon after running out of the U.S.-built parts required to assemble the Chevrolet Silverado and GMC Sierra, while Oshawa’s second line that produces the Chevy Impala kept operating with the remaining 1,400 workers.

Operations at GM’s other Ontario plants in Ingersoll and St. Catharines, which respectively build the Chevrolet Equinox and engines, were “unimpacted” Wednesday as GM continues to monitor the situation, spokeswoman Jennifer Wright said in an email.

The Canadian auto sector has been expecting disruptions since Sunday at midnight when about 48,000 United Auto Workers members walked off the job at more than 70 facilities in 19 states after reaching a stalemate in collective bargaining over raises and better healthcare at a time of record profits for GM.

Auto industry analyst Dennis DesRosiers expects more production stoppages unless negotiations wrap up fast.

It’s normal for plants to have only enough parts to supply a day or two of work, what with just-in-time manufacturing patterns, DesRosiers said. The CAMI plant in Ingersoll likely anticipated the strike and, given the popularity of the Equinox, built in a couple of weeks’ worth of extra inventory as a cushion, he said.

“That says the internal braintrust at GM believes this is likely to be shorter strike, not a longer strike,” he said.

But in the short term, the supply chain disruptions are expected to hit autoparts manufacturers that employ about 74,000 workers in Ontario, he said.

“By today or by the end of the week, every one of those parts manufacturers tied to GM will be laying off workers producing GM componentry,” he said.

Demonstrators wave at a coworker cycling past during a United Auto Workers strike outside the GM assembly plant in Flint, Mich. Anthony Lanzilote / Bloomberg

Unifor president Jerry Dias said about 12 suppliers will be affected if Oshawa shuts production this week, including Lear and Inteva. While he said CAMI has stockpiled engines and can keep going another week, he expects about two thirds of the approximately 1,300 workers in St. Catharines to face temporary layoffs, as about 90 per cent of its engines go to the U.S.

Workers at the Oshawa plant will receive full pay during the production halt because the plant is slated to stop production in December and GM had already promised them full pay for their last 16 weeks on the job. GM also plans to spend $170 million to turn the plant into a parts manufacturing facility and a test track.

Still, Dias said Unifor members support the UAW workers south of the border.

“Workers in Canada and the U.S., they all feel betrayed,” Dias said, pointing to GM’s November 2018 announcement that it planned to shutter four plants in the U.S. and one in Canada.

“We’re sick and tired with preoccupation of plants closing while GM has a significant footprint in Mexico,” he said.

Yet labour strikes in the U.S. could encourage manufacturers to look for calmer labour markets when planning major investments, said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association. He’s surprised the strike has lasted this long in this environment, where the strike is costing millions of dollars in a battle for public support.

“It’s already longer than either side could afford it to last,” he said.

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