GM to Union: End Strike or Automaker Will 'Wind Down' Equinox Production
Talks between General Motors and Canadian union Unifor seem to have broken down after the automaker mentioned it might wind down production of the Chevrolet Equinox at the striking CAMI Assembly plant in Ingersoll, Ontario. Negotiators explained to the union that the cost of continuing the month-long strike would mean losing more business to Mexico, which has already been filling Canadian production gaps since before the strike began.
GM currently builds the popular Equinox at three North American facilities: the CAMI plant, and two Mexican plants. With a shrinking 41-day supply of rolling stock at the end of last month, the facilities located south of the border can’t produce an equivalent volume to the Canadian worksite. However, GM suggests that could change if Unifor doesn’t throw in the towel soon.
According to Reuters, the automaker is already planning how it could modify supplier logistics and heighten production capacity in Mexico. Unifor president Jerry Dias spilled the beans via a phone call.
“GM just told us today that they are going to ramp up production in Mexico,” he told Reuters on Wednesday. “They have declared war on Canada.”
Unifor is unlikely to bend. General Motors’ decision to shift assembly of the GMC Terrain from the CAMI plant to San Luis Potosí is one of the chief reasons the factory went on strike. Losing the Terrain to Mexico resulted in about 600 lost jobs and union employees immediately demanded the manufacturer promise Canada would be the primary assembly site for the Equinox. However, GM chose to spread that vehicle’s production between CAMI, Ramos Arizpe Assembly, and San Luis Potosí.
The CAMI plant was initially projected to build about 210,000 vehicles in 2018, while the two Mexican factories were estimated to build 150,000, according to AutoForecast Solutions. While that’s likely enough to cover demand of the SUV in North America, every month of production lost in Canada runs the risk of creating shortages. At best, GM probably has another month before entering dangerous territory with its Equinox supply.
Dias indicated he will not call off the strike. “This is the big issue,” he said. “Once we solve this, everything else will fall into place.”
The Unifor president claims GM only cares about profit and has no vested interest in protecting Canadian or American jobs. “This is about autoworkers in Mexico making $2 an hour [and] the movement of good paying middle-class jobs to Mexico,” he said.
Currently attending the NAFTA talks in Washington, Dias faulted the agreement for some of Canada’s industrial losses to Mexico. However, GM also has to cope with NAFTA’s uncertain future. While the company clearly has its bottom line in mind, it did invest $800 million to retool the CAMI plant for the Equinox’s third generation. There is little reason to assume it will abandon Canadian production in the near future. But with so much SUV production now shifting to Mexico, Unifor’s fears aren’t unfounded.
Nobody has any idea if NAFTA will even exist in the next few years. As a result, unions want reassurance and automakers want to remain flexible.
[Image: General Motors]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Ultimately, the Americans and Canadians should be arm in arm over NAFTA, ignoring the entire union argument. At the end of the day, if you can go to Mexico, and pay garbage wages, with minimal safety standards, and dump stuff into the air and water for minimal cost, and ship the finished goods to the USA and Canada with no tariff, the USA and Canada are ALWAYS going to lose this deal. When it is time to build a new plant, or raze or modernize any facility in the USA or Canada, Mexico is going to look extremely attractive. Sure there are things like crime and gangs in Mexico or other political issues, but economically, the USA and Canada will never ever ever compete with Mexico on wages or safety or pollution regulations. To me, this is the disgusting part of all this. It has nothing to do with the unions. I understand the arguments for open/free trade, efficiencies, cost of goods etc. But without tariffs that compensate for the lack of decent wages, social safety nets, workplace safety, and pollution, goods made in Mexico, China, Vietnam, (insert other 3rd world country here) will always be cheaper. There is no level playing field, there is no competition based on efficiency, hard work, work ethic or any of that garbage. Level the playing field in Mexico by bringing them up to 1st world (USA/Canada) standards, or there MUST be tariffs on Mexican goods to level the playing field. Without this, Americans and Canadians will continue to lose manufacturing jobs. Really, I think I'd be fine with a CAFTA agreement. Americans and Canadians really are awfully close on living standards, safety, emissions. This would truly be about as free-trade as one could get, and a big benefit to both sides I'd think. But Mexico has to either come up to those standards, or they gotta go and be subject to import duties. I feel for the workers at the plant. At the same time I completely understand GM's perspective. And if you've got the Mexican cheap carrot dangling in front of you, you've gotta do what is best for the company from a financial perspective. I really cannot blame GM or anyone else for going to Mexico in the current environment.
This is not a union only thing. I think we must all take a stand against GM here, the local Buick GMC dealer in Oshawa has about 200 trucks on the lot, all but 3 are made in Mexico. A full line of about 20 new Terrain's all built in Mexico. Several Envisions from China. The absurd thing is they are all being sold to current and former GM employees. Canada must take a stand here against GM, let us start by not purchasing any vehicles whose VIN number starts with a '3' for Made in Mexico or 'L' for made in China. There are lots of vehicles sold here that are made in Canada and the USA, and I have no problem supporting those manufacturers, but by purchasing from mexico or China you are cutting your own throats.