General Motors’ labor contract with Unifor expires Nov. 4 and as the deadline approaches an old issue hovers over the talks.
Neither GM nor Unifor are commenting on the state of negotiations. But Unifor President Jerry Dias has said in comments leading up to the official start of negotiations back in August that he wanted GM to restore vehicle production in the company’s manufacturing complex in Oshawa, Ontario, outside of Toronto.
GM announced two years it was ending vehicle assembly in Oshawa as part of a corporate restructuring that also led to the shutdown of the company’s big assembly plant in Lordstown, Ohio. The lack of public updates from either side may be a sign of a protracted negotiation. Oshawa employees have a history of employing tried-and-true union tactics to make their point and gain leverage.
Members of Unifor staged a series to brief sit-down strikes inside the Oshawa assembly plant, and the union even bought an advertisement on the Super Bowl telecast in February 2019 to attack GM’s decision to close the plant. Dias eventually negotiated an agreement that cleared the way for GM to end vehicle production toward the end of 2019, keeping some manufacturing work in the Oshawa complex.
Many GM workers in Oshawa felt the company had reneged on the commitments it made during the previous contract negotiations in 2016.
Earlier this fall, Unifor negotiated new labor agreement with Ford Motor Co. and Fiat Chrysler Automobiles N.V., setting the pattern for the talks with GM. Under the pattern bargaining that has prevailed in the auto industry in the U.S. and Canada for nearly 70 years, GM would be expected to sign the pattern agreement, with some minor adjustments, without much of a fuss.
The pattern agreement signed by Ford and FCA included a signing bonus, a modest pay increase during the three-year term and a shorter grow-in period before new hires hit the top wage. It also included major new investment in plants in Ontario to satisfy Unifor’s top demand.
FCA agreed to invest $1.4 billion in its assembly complex in Windsor where the company expects to build a new family of electric or electrified vehicles by 2024.
Ford also agreed to spend $1.46 billion to re-tool an assembly plant in Oakville, Ontario.
While the Canadian federal government and Ontario provincial government would certainly offer GM the same incentives they are offering Ford and FCA for their respective projects, GM has offered no clues on whether it is willing to utilize the Oshawa plant for vehicle assembly at some point in the future.
GM is renovating the old Detroit-Hamtramck plant, which two years ago was on the corporate chopping plant along with Oshawa but has now been renamed Factory Zero, to build electric vehicles, including the new GMC Hummer EV. It also announced plans to spend $2 billion to modernize an assembly plant in Spring Hill, Tennessee.
While sales of some new vehicles have been relatively brisk during the pandemic, automakers have stepped up their efforts to keep tight control on capacity. Overcapacity was long considered by Wall Street as one of the industry’s biggest financial problems, particularly at GM.
However, Unifor complained for years as GM invested in new capacity in Mexico where workers are paid substandard wages of $2 per hour. A dispute about the shift of work to Mexico from Canada led to a strike in 2017 by Unifor at a GM utility vehicle plant in Ingersoll, Ontario. The plant had a labor agreement separate from Unifor’s master agreement with GM.
The new United States Mexico Canada free trade agreement enacted this year by the Trump administration includes new rules of origin that require greater North American content and new rules requiring companies to pay Mexican workers higher wages.
However, the new NAFTA, according to analysts, is not expected to prompt manufacturers to move jobs from Mexico to the United States or Canada, thus there is no incentive for GM to transfer any vehicle assembly from Mexico to Canada, as Unifor’s Dias is likely demanding. The lack of updates from either side may be indicative of GM digging in its heels to keep the status quo at Oshawa as the union pushes hard to get that work back to the massive complex near Toronto.