The cost of doing business in Canada may be high for auto makers, but that isn’t stopping GM from looking to re-negotiate their contract with the CAW nearly a year in advance as a means of keeping production of the Chevrolet Equinox and GMC Terrain at the CAMI plant in Ontario.
While GM has proposed moving production to facilities in Mexico and Tennessee, the auto maker is leaning in favor of sticking with CAMI (though a current arrangement has overflow being sent to Tennessee).
The Globe and Mail reports that GM would like to start negotiations with the CAW soon, rather than in September, to get a better picture of the long-term labor costs associated with production at CAMI. Workers will ostensibly get the same deal that GM’s Oshawa workers recieved, though CAMI’s workforce isn’t able to take advantage of provisions in the deal that mandate cheaper wages for new hires, a key cost cutting measure for GM. With three shifts and overtime in place, there will be little hiring of new workers, meaning that legacy workers and their higher labor costs will continue to make up the bulk of the workforce.
Strong sales of the crossovers has meant that CAMI is operating at 150 percent of capacity, making it one of GM’s most successful plants. Aside from the plant’s success, the continued production of the Equinox and Terrain in Canada will help satisfy GM’s requirements to build at least 16 percent of its vehicles in Canada, under the terms of a bailout package handed out to GM by two levels of Canadian government. Early reports suggested that the departure of the Impala and Equinox/Terrian would bring GM below that threshold.