Canadian Government White Knight as Unifor, GM Reach Tentative Deal

With a strike deadline looming General Motors reaches agreement with Canadian workers on a tentative contract that is expected to keep GM plans in Ontario busy for years to come.

The tentative agreement with Unifor, the union representing 3,900 GM workers in Canada, not only keeps job in Canada but also could help the union’s organizing drives at Honda and Toyota, Unifor President Jerry Dias says during a late-night press conference in Toronto.

Dias says the tentative agreement still needs polishing and proofreading but the two sides have agreed to a “framework” that includes the commitment of significant new investment in Canada by GM.

In the days before the settlement, Canadian media reported the Canadian government of Prime Minister Justin Trudeau, who took office in November, had sweetened the pot by indicating it would match GM’s investments with tax dollars.

Under the terms of the settlement announced by Dias and GM, the automaker’s assembly plant in Oshawa, ON, an engine and transmission plant in St. Catharines, ON, and a parts depot in Ontario all will receive significant new investment that will fortify GM’s position in Canada.

Dias says the key to the settlement was the automaker’s willingness to discuss the critical issue of new investment, which was the union’s top priority since formal discussions began last month.

“It was our top priority,” Dias says. “It provides job security for members who haven’t had job security in more than 10 years.”

The new investment promised in the tentative agreement also somewhat balances the flow of automotive investment across North America, of which more and more has gone to Mexico in recent years. In fact, as part of the agreement, GM plans to shift some engine production from Mexico to the plant in St. Catharines, Dias says.

The other critical element of the tentative settlement is a commitment by GM to bring a new product to the Oshawa assembly plant outside Toronto.

“Oshawa will get a new platform that will be able to be used for both a truck and a car,” says Dias, who promises to provide more details when he presents the complete contract to Unifor members later in the week. “GM has agreed to hundreds of millions of dollars in Oshawa.”

The pact allows GM to follow through with plans to end production on one of the assembly lines in Oshawa next year as planned, but its second line will pick up new work that will completely utilize the current workforce and even create additional jobs.

“No jobs will be lost at Oshawa,” Dias says.

The tentative contract also includes a pay increase and signing bonus, details of which will be presented to union members in the next couple of days, Dias says.

In a statement e-mailed to reporters after the Unifor press conference, GM says the deal “will enable significant new product, technology and process investments at GM’s Oshawa, St. Catharines and Woodstock facilities, placing those operations at the forefront of advanced manufacturing flexibility, innovation and environmental sustainability.”

The statement notes the agreement is subject to ratification by Unifor members and will launch a dialogue with government officials.

“We will be working with government on potential support and will provide further details on the investment at the appropriate time, while respecting Unifor’s ratification process,” the GM statement adds.

The union did make one major concession. New employees hired by GM will be eligible for a defined-contribution pension plan, rather than the defined-benefit pension plan covering existing workers. Capping pension costs was one of GM’s major objectives.

In return, GM agreed to make 700 temporary workers full-time employees, a concession Dias describes as a major win for the union, because it will bolster the union’s organizing efforts at the assembly plants Honda and Toyota operate in Ontario.

“Those temporary employees at Honda and Toyota now know the way to get full-time employment is through collective bargaining,” Dias says.

Unifor has been attempting to organize the Honda and Toyota plants in Ontario for the past two years without success.

The fallout from a strike in Canada would have spread quickly to other GM assembly plants in the U.S. and Mexico, because the GM operation in St. Catharines is a key supplier of engines and transmissions to other North American factories.

Dias had  dramatized the talks from the start, saying they represented a “once in a generation” opportunity to secure the future of auto manufacturing in Canada, which he warned was in danger of dwindling in the face of competition from the U.S. and Mexico.

Unifor has used its website to win support for its position in the negotiations, which now will continue with discussions with FCA Canada and Ford Canada. GM, however, was considered the key to this year’s negotiations, because Ford has hired nearly 2,200 new employees over the past three years and FCA has completely retooled its big minivan assembly plant in Windsor, ON, across the river from Detroit.

“For every job in auto, seven more are created throughout the Canadian economy at suppliers and other companies that sell to the auto plants, as well as the spending done by those workers,” Unifor noted on its website. “The taxes paid by those workers support schools, hospitals and other public services on which we all rely.”

Unifor also had emphasized in the run-up to the discussions with GM that an independent study from the Centre for Spatial Economics released in September showed the importance of the auto industry in Canada, finding automakers based in the U.S. contribute some $26 billion to the Canadian economy, up to 150,000 jobs and up to $4.7 billion per year in government revenues.

In 2015, the Centre found more than 30,000 workers rely on the GM facility for their future and the operations contribute more than C$5 billion ($3.8 billion) to Ontario’s gross domestic product and provide the federal and Ontario government’s C$1 billion ($760 million) in revenue.