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GM Oshawa could be running by Friday now that UAW, automaker have reached tentative deal

MICHAEL MARTINEZ, Automotive News Canada
October 16, 2019

General Motors Canada says it hopes to resume Canadian operations quickly, now that the UAW and automaker have reached a tentative deal on a new four-year labour contract in the United States.

The strike by 46,000 hourly workers at 30 GM plants in the United States crippled auto production and supply chains in Canada and Mexico.

It was not immediately clear when the work stoppage, currently the longest against GM since 1970, would end. But workers at GM Canada’s Oshawa plant could be back on the job before the weekend, a company spokeswoman said.

“We are working hard to get all three GM Canada plants back to normal operations as soon as possible, starting with our Oshawa plant which we expect to resume operations this Friday,” Jennifer Wright said in an email to the Canadian Press.

The strike led GM Canada to idle its vehicle assembly in Oshawa, Ont., where the previous-generation GMC Sierra and Chevrolet Silverado pickups undergo final assembly. The factory also produces the Chevrolet Impala.

Temporary layoffs in Oshawa started there on Sept. 20. Eventually, all but about 300 of the roughly 2,600 hundred employees there were furloughed during the strike.

About 700 of the 1,100 employees at the St. Catharines, Ont., Propulsion Plant, which supplies V8 and V6 engines to the GM supply chain throughout North America, were temporarily laid off Sept. 23.

Roughly 300 workers in Oshawa and 400 workers in St. Catharines continued to work, supplying the automaker’s CAMI plant in Ingersoll, Ont., where the popular Chevrolet Equinox is made.

The plant shutdowns in Ontario, and subsequent production halts by suppliers to the plants, left as many as 5,000 workers temporarily laid off in the province.

UAW VOTING TO END WALKOUT

The union’s national GM council will gather in Detroit Thursday morning to decide if they’ll accept the tentative deal and vote on whether to immediately end the walkout or continue it until the tentative agreement is ratified by members. Union officials plan to discuss the contract journalists following the meeting.

“We can confirm the UAW’s statement regarding a proposed tentative agreement,” GM said in a statement. “Additional details will be provided at the appropriate time.” GM shares rose 1.1 per cent to close at $36.65 (all figures in USD unless noted) on Wednesday.

“We have been working very hard on getting an agreement that makes the most amount of sense for our employees, for our business. We’ve been working around the clock on that,” GM CFO Dhivya Suryadevara said at the Automotive News Leading Women conference Wednesday.

The strike became a political event. Democratic presidential candidates joined UAW picket lines, eager to win union votes in Midwest swing states. For his part, President Donald Trump put pressure on GM CEO Mary Barra before the strike to preserve jobs at a car plant in Lordstown, Ohio, that she had targeted for closure.

Trump spoke individually with Barra and UAW President Gary Jones on Wednesday, spokesmen for GM and the union confirmed. The White House declined to comment on the discussions.

An end to the strike would bring relief not only to union members who have lived for nearly a month on $250 weekly strike pay (which on Oct. 13 was bumped up to $275 weekly), but to dealers desperate for repair parts, suppliers waiting to fulfill orders and an automaker that has hemorrhaged an estimated $50-$100 million per day as its inventory has dwindled.

Details of the proposed pact were not immediately available, although the union, in a statement, said it had achieved “major wins” for its members. GM’s most recent offer to the union included plans to invest $7.7 billion directly in U.S. plants, a person familiar with the negotiations told Automotive News. The total amount committed to GM’s U.S. plants would be $9 billion, including indirect investment related to battery-cell manufacturing in Ohio, the person told Automotive News.

The proposal also included guarantees to hire temporary workers to full-time positions after logging three years with the company, and to remove the cap on profit sharing, which maxes out at $12,000, a person familiar with the deal said.

The person said it would create or retain 9,000 UAW jobs. CNBC earlier reported that figure. GM in September said its initial offer would support 5,400 jobs — and a majority of those would be new jobs.

GM had also proposed three per cent pay raises in the second and fourth year of the four-year pact, and three per cent and four per cent lump sum payments in the first and third year, respectively, the person said. GM would reportedly offer full-time workers a $9,000 ratification bonus and temporary workers a $3,000 bonus, the person said.

Prior proposals from the automaker have called for an electric pickup to be built at the automaker’s Detroit-Hamtramck Assembly Plant, and to retain carryover health care benefits that include a three per cent cost-share for members.

If the UAW’s GM Council approves, union locals are expected to schedule ratification votes on the deal. The union’s ratification process typically takes several days, perhaps as long as two weeks.

“The number one priority of the national negotiation team has been to secure a strong and fair contract that our members deserve,” said UAW Vice President Terry Dittes, director of the UAW GM Department, said in a statement. “We are extremely grateful to the thousands of Americans who donated goods and helped our striking workers and their families. As we await the Council’s decision, please know that the outpouring of community and national support will be etched in the memories of all of us at the UAW for years to come,”

The union struck GM late Sept. 15. Analysts estimated the work stoppage cost GM about $1 million per plant, per hour. The union, facing the prospect of plant closings in Michigan and Ohio, sought greater job security, protections for temporary employees, wage increases and a quicker path to top wages for all workers.

‘HOPEFUL AND CONFIDENT’

“Today we’re feeling hopeful and confident,” said John Hatline, a 35-year skilled trades training representative at GM’s Detroit-Hamtramck plant. “We won’t know for sure until they roll it out to us and explain more, but as long as we can get something for the temporary workers, in-progression workers, traditional workers and people who are retiring, I think the contract will pass.”

“People are upbeat,” said Hatline, 64. “We’re also suspicious. We’ve been suspicious of General Motors for years so until we actually see the contract and what’s inside of it I really can’t say what our membership is going to do

“What’s important for us outside this plant today is that we retain a product,” he said. “This plant was unallocated and scheduled to close. If we can retain a product here to keep our families fed and keep our people employed would be fantastic.”

Scott Ferguson, 65, a paint repair employee at the plant for 46 years said he believes the Detroit-Hamtramck plant will have product to produce after the strike.

“I’m assuming we’ll have an electric truck,” he said.

GM, Detroit’s most profitable automaker in recent years, wanted greater flexibility to manage employment levels in the event of a downturn in the U.S. new-vehicle market. It also pressed the union to shoulder more costs for health care coverage.

Barra and GM President Mark Reuss met UAW leaders on Tuesday at main table discussions. It was the second time Barra was directly involved, after calling a meeting with top union officials the week prior to help speed up negotiations.

“GM probably knew we’d be out about this long,” Ferguson said. “This is a big game, in a way.”

He added: “I feel good about the fact that we’re fighting this time not just for us at Detroit-Hamtramck, but fighting more for the middle class as a whole.”

If members ratify the deal, negotiations would move to either Ford or Fiat Chrysler Automobiles. Representatives for both automakers have continued initial discussions with union bargainers while the focus was on GM.

INTERNATIONAL IMPACT

Flavio Volpe, head of the Canadian Automotive Parts Manufacturers Association, said Canada’s supply chain will be back to work “as quickly as [GM] can get their assembly plants back up.”

“Everybody is frustrated.” he said. “You started with 30 plants and it infected all the plants north and south of the border.”

Volpe warned of the strike’s lasting impact when it comes to new investment in the United States.

“Certainly the UAW has shown it is willing to shut down one of the world’s biggest automakers for weeks,” he said. “That’s not something site selectors are going to forget any time soon.”

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