GM Switching Carriers in Wake of Labor Dispute

General Motors is taking “immediate steps” to find a new U.S. car hauler after Allied Automotive Group withdraws its services, the auto maker says today.

Allied’s move follows a reversal of its plans to slash employee pay by 20%, a contravention of the company’s contract with the Teamsters union.

The Atlanta-based company also is withholding its services from Chrysler. The auto maker says it is considering “options.”

Says GM: “Allied has made the decision not to provide services for GM. We are taking immediate steps to re-source the work previously performed by Allied.”

Calls to Allied’s major competitors, Illinois-based Cassens Transport and Jack Cooper Transport in Kansas City, MO, have not been returned.

Neither GM nor Chrysler report production or delivery disruptions, though a union official describes a bottleneck outside GM’s plant in Ingersoll, ON, Canada, home to the hot-selling Chevrolet Equinox cross/utility vehicle.

“Our yards are filling up,” says Dan Borthwick, president of Canadian Auto Workers union Local 88 in Ingersoll.

A Teamsters statement says Allied’s about-face – the result of intense negotiations launched last week – averted a walkout that would have had nationwide implications.

Chevrolet Equinox bottleneck??

“Our members were prepared to go out on strike to ensure that Allied honored the contract,” says Fred Zuckerman, director of the Teamsters car-haul division.

In a bid to help the company, the union had agreed to wage cuts in 2007. That deal was set to expire in May 2010, but Allied pushed to extend it.

The Teamsters’ objections were upheld by a court ruling, as well.

Allied also hauls vehicles for Ford, Toyota, Honda, Nissan and Volkswagen. Ford reports “normal” shipping patterns and Nissan expects no disruptions.

Toyota declines comment, other than saying it was “prepared with contingency transportation” in the event of a strike.

Honda and VW indicate they are assessing the situation, but offer no immediate comment.

The CAW’s Borthwick tells Ward’s GM is looking for additional lots near its Ingersoll plant to park overflow vehicles. “It won’t take long to fill those up, either,” he says, because the site’s 3-shift work force makes about 1,000 units every day.

As of Feb. 28, GM had a day’s supply of 30 and 34 units, respectively, of the Equinox and its platform-mate GMC Terrain, according to Ward’s data. The industry norm is a 60 days’ supply.

GM faces a second problem. Allied drivers in Canada are represented by the CAW and few union-backed carriers exist in the area. If GM goes with a carrier not represented by the CAW, “that would be a problem,” Borthwick says.

The Teamsters represent 2,500 Allied workers at 59 locals in the U.S. and Canada.

Allied’s actions come as logistics already are top of mind in the industry. Auto makers are scrambling to determine the impact of last week’s earthquake and tsunami in Japan.

The disasters have halted production and choked the flow of finished vehicles and parts from the island nation, the world’s second-largest vehicle producer.

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