By on July 25, 2012

With 25 percent of its manufacturing capabilities in Canada, Chrysler would be hardest hit in the event of a strike by the Canadian Auto Workers union.

An article in the Windsor Star outlining the upcoming negotiations between The Big Three and the CAW describes how Chrysler is most vulnerable to a potential strike by the CAW. Tony Faria, professor emeritus of business at the University of Windsor told the paper

“The minivan is still a very important product, even though the segment is down…For Chrysler, the minivan represents about 10 to 12 per cent of its global sales.”

The Chrysler minivans are built solely at the Windsor plant, meaning a strike would cripple one of Chrysler’s core products in both the U.S. and Canada. Faria also noted that

“Ford, however, wouldn’t have much to lose since it’s producing low-selling vehicles, such as the Edge and Flex, and GM could shift at least overflow production of its hot-selling Chevy Equinox to its plant in Spring Hill, Tenn.”

Of course, this is all assuming there even is a strike. The whole thing could be averted if negotiations between the automakers and the CAW goes well – which is up for debate. The automakers are pushing hard to bring labor costs down to U.S. levels, while the union is looking for wage increases and a cost-of-living-adjustment. Chrysler’s Sergio Marchionne has suggested alternatives, including profit sharing and other lump-sum deals in lieu of wage increases.

Observers, including Faria, feel that Chrysler will most likely be targeted first for negotiations (since the first deal reached with an automaker generally sets the tone for the other agreements), but GM may also emerge as a contender, since the CAW is looking to secure product guarantees for their Oshawa plant. GM CEO Dan Akerson recently claimed that Canada was the most expensive place in the world to build cars.

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5 Comments on “Chrysler Would Be Hit Hardest In CAW Strike...”

  • avatar

    I do not believe that there will a strike. This is all bluster and bluff.

    In the unlikely event that someone decides to push the issue and strike, they will be richly rewarded by Fiat through having production increased elsewhere in the world while theirs is stagnated and/or reduced.

    The name of the game this millennium is to diversify production locations so as to minimize the impact of strikes, labor unrest and other interruptions. Mexico and NAFTA come to mind.

  • avatar

    Actually, in a CAW strike the hardest hit will be the CAW. Or more correctly, CAW members at Chrysler plants.

  • avatar

    No mention of Routans being affected? Overpowered by the VW/Porsche news perhaps…

  • avatar

    Would a strike really have much adverse effects? Couldn’t the striking workers live on unemployment and/or strike benefits? August seems like a nice month to go vacationing in the Canadian Rockies. As for Chrysler, don’t they have one or two months of inventory on hand? Plus, this is the time of year for plant shutdowns for model year changeover.

  • avatar

    Give Sergio a reason to move production elsewhere. Go ahead.

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