GM will maintain some Impala production in Canada.
Days after coming to terms with Ford Motor Co., the Canadian Auto Workers Union has reached a settlement with General Motors heading off a potentially costly strike.
Despite concerns that GM would demand a unique settlement it largely settled for the same pattern contract negotiated with Ford earlier in the week. That leaves only Chrysler to settle on a new 4-year agreement – though the maker has consistently argued it needs to break pattern and come up with a contract that reflects its own unique needs.
“We met the entire Ford pattern,” boasted CAW President Ken Lewenza following settlement on the GM contract.
The agreement will result in GM getting some significant concessions on labor costs but also ensure that no senior workers are on layoff for the first time in two decades. The maker has also agreed to significant new investments at two key Canadian GM plants.
As recently as Sunday night it seemed a strong possibility the CAW would lead a walkout against one or more of the Detroit-based makers. But after naming Ford its “strike target,” negotiations picked up speed resulting in a settlement on Monday night, just short of the midnight deadline.
The GM settlement will match that at Ford in getting new workers placed onto a reduced pay scale. But unlike their counterparts in the U.S. there will be no formal two-tier wage structure. After a decade, new hires will climb up to the same pay as veteran colleagues. Nonetheless, the deal should yield significant cost savings in a country now considered one of the most expensive in which to manufacture automobiles.
For the CAW, one of the big breakthroughs with the GM contract is the maker’s commitment to invest C$675 million at the Oshawa, Ontario assembly plant and a nearby powertrain facility. Meanwhile, new products at the plant could lead GM to keep one of the lines planned for closure in Oshawa open. In all, GM committed to maintain or add 1,750 jobs in Canada during the life of the four-year agreement.
Workers will also receive a C$3,000 ratification bonus under the contract – but will lose future cost-of-living adjustments.
A strike would have resulted in a shortage of several key GM vehicles including the Cadillac XTS and GMC Terrain. In turn, the CAW will now continue building the Chevrolet Impala which, prior to the settlement, GM had intended to shift entirely to an assembly plant in Detroit.
“This set of talks with our labor partner have been candid and constructive, reflecting the challenges facing Canadian manufacturers,” said David Wenner, general director of labor relations for GM of Canada, said in a statement.
With the settlement at GM the CAW will now focus on wrapping up talks with Chrysler – but it remains to be seen whether the maker, which is heavily dependent upon its Canadian operations, will continue to press for a unique settlement or give in under pressure to adopt the Ford and GM pattern.