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GM and Canadian Union Manage to Stave Off a Strike

September 20, 2016

General Views of General Motors Co. Oshawa Assembly PlantGeneral Views of General Motors Co. Oshawa Assembly Plant
The General Motors assembly plant in Oshawa, Ontario, Canada, on Aug. 8, 2011. Brent Lewin/Bloomberg via Getty Images

General Motors (GM) and the Canadian autoworkers union announced a tentative contract deal early Tuesday morning, averting a strike that would have shut some of the automaker’s Canadian manufacturing facilities.

Unifor said the tentative deal will prevent the closure of GM’s Oshawa assembly plant, bring some engine assembly from Mexico to GM’s St. Catharines, Ontario facility, and increase wages for existing employees. Union members will vote on the deal on Sunday.

“The commitment to Oshawa is hundreds of millions of dollars, therefore our fear of a closure in 2019 is now over,” Unifor National President Jerry Dias said.

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The union made a concession on pensions for new workers, agreeing to a pure defined contribution plan, the first such plan under the master agreement that covers most assembly workers at GM, Ford Motor Co and Fiat Chrysler. Veteran employees have defined benefit pensions, and those hired since 2012 have a hybrid plan with defined benefit and defined contribution portions.

In a statement, GM Canada confirmed it had reached an agreement that would allow “significant new product, technology and process investments” in Oshawa and at the company’s St Catharines powertrain plant.

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“We will be working with government on potential support, and will provide further details on the investment at the appropriate time,” the company said.

Dias did not say what vehicle model or models would be built in Oshawa, but said the plant would become capable of producing both cars and trucks. The plant currently builds cars.

Dias also said the agreement would ensure Oshawa hires workers in the short and long term, even as the scheduled closure of one of the plant’s two assembly lines, the consolidated line, goes ahead as planned in 2017.

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He said some volume of engine production would shift from Mexico to St. Catharines, the first time he can remember product moving from Mexico to Canada: “We’ve seen enough of it going the other way around,” he said.

Under the union’s practice of pattern bargaining, the deal with GM sets a pattern that Ford and Fiat Chrysler will be expected to follow closely in their contracts.

The deal is subject to a ratification vote, scheduled for Sunday. Dias said he expected to select a second target company within 24 hours.

A four-year contract covering some 20,000 Canadian autoworkers at the three automakers expired on Sept. 19, but only GM workers were in a legal strike position on Tuesday.