Calling Canada “the most expensive place in the world to build a car right now“, Dan Akerson threw his hat into the “hourly wage costs need to come down” ring at GM’s annual shareholders meeting on Tuesday.
Unlike in the United States, there is no two-tier wage scale for Canadian Auto Workers union members, a decision that prompted GM to close a line at the Oshawa assembly plant, and move production of the Impala and Equinox to plans where workers can make $14 an hour rather than $32 an hour.
GM’s “all-in” labor costs in Canada are estimated to be $60 per hour, whereas the pre-2011 agreement that GM had signed with the UAW meant that American labor costs pegged at about $56 an hour. Negotiations between the Big Three and the CAW are due once the current labor contracts expire in September. The CAW responded by stating that the strong Canadian dollar and higher labor costs was evened out by increased productivity. GM’s Oshawa plant in particular has a stellar reputation as one of GM’s best plants.
Sparring over things like cost-of-living adjustments has already begun between the two sides, while bonuses based on company profitability are expected to be the biggest sticking point in negotiations.