General Motors and a union narrowly averted a strike by 3,900 Canadian workers on Tuesday in a deal that the union hopes could serve as a model for preserving dwindling auto jobs in Canada.þþUnder a tentative pact reached as a midnight Monday deadline expired, G.M. will close one of two assembly lines at its Oshawa, Ontario, plant, its largest in Canada, according to Jerry Dias, the leader of Canada’s Unifor, the country’s largest private sector union.þþBut the automaker agreed to rebuild another assembly line there to produce cars and trucks simultaneously, Mr. Dias said. As a result, he said, total employment will increase in Oshawa, which currently has about 5,700 total workers, including engineering and other nonunion employees.þþAnd in a provision that bucks a recent trend in which the auto industry moves jobs out of Canada, Mr. Dias said the automaker also had agreed to move production of one engine from Mexico to another Ontario plant.þþThe tentative deal, he said, “really turned the tide of what has happened in the auto industry in this country for over a decade.”þþIn a brief statement, G.M. said that the agreement would lead to “significant new product, technology and process investments” at its two Canadian factories, as well as a parts warehouse in Ontario. The company added that it would be looking for government funding to cover some of the investment.þþUnifor hopes the deal will serve as a way to preserve Canadian auto jobs. The cars and trucks produced there, most of which are shipped to the United States, are a vital component of the country’s exports.þþBut last year, 2.2 million cars and trucks were made in Canada, compared with 2.6 million 10 years earlier. And since the 2008 recession, Canada has watched as far more investment in new factories has headed toward the United States and, increasingly, Mexico.þþAt the outset of negotiations, Mr. Dias said the union was focused on keeping jobs in Canada, rather than on traditional issues like improving wages and benefits. The carmaker was similarly clear that it would not make a decision about any investments in Canada until after the negotiations concluded.þþIn recent years, General Motors has pulled back production in Canada.þþThe company is gone from Windsor, Ontario, the city across the river from Detroit. Most of what was once a transmission plant there is now a pile of demolition rubble. From the site, the cylindrical towers of G.M.’s world headquarters are clearly visible.þþUnifor feared a similar future awaited Oshawa, where the company and its predecessors have been making cars for 108 years.þþThe Oshawa plant has two assembly lines. One, which produces the Chevrolet Equinox, is to close under the new deal. The other builds the Cadillac XTS, the Buick Regal and the Chevrolet Impala.þþA much newer G.M. plant in Ingersoll, Ontario, seems to have a comparatively secure future. It is the company’s main source of the Equinox, a top-selling small sport utility vehicle, as well as of the similar GMC Terrain. That factory is covered by a separate contract that expires next year.þþG.M. also operates a plant that produces engines and transmissions in St. Catharines, Ontario, which Mr. Dias said also required investment from the company.þþUnder the new labor pact, G.M. is to move some engine production to St. Catharines from Mexico. The new pact also calls for wage increases and for making currently temporary workers full time, but new workers will receive defined contribution retirement plans, rather than full pensions.þþNow that it has settled with G.M., Unifor must deal with clouds hanging over some factories owned by Ford Motor Company of Canada and FCA Canada, part of Fiat Chrysler. The Canadian manufacturing operations of Honda and Toyota are not unionized.þþFCA recently renovated a plant in Windsor that makes minivans, but uncertainty surrounds its former American Motors factory in the Toronto suburb of Brampton, Ontario, which produces large rear-wheel-drive cars. And while there is little near-term concern about the Ford assembly plant in Oakville, Ontario, that is not the case with an aging factory in Windsor that builds large 10-cylinder engines.þþDuring the contract talks, Unifor pitched the weakness of the Canadian dollar as a potential cost advantage for American carmakers, providing a discount on spending in Canada. But companies are generally reluctant to base long-term investment plans on fluctuating exchange rates.þþThe union also highlighted its pay system, in which workers do not reach full-scale wages for 10 years, presenting an advantage over that of American unions. But Canada is trying to find its place at a politically sensitive time when the United States wants to bring more jobs home.þþGreig Mordue, an associate professor at McMaster University in Hamilton, Ontario, and the former general manager of Toyota Motor Manufacturing Canada, said that Canada had become unable to effectively compete with Mexico for factory investments.þþ“Policy makers used to be focused on expanding production” in Canada, said Mr. Mordue, who has also worked in government. “Now they’re focused on sustaining what they’ve got.”þþHe cited a combination of factors. Most carmakers have developed standardized manufacturing systems. So quality control and productivity remain relatively consistent in different locations, according to Mr. Mordue.þþCar companies can also recruit factory workers with higher skill levels than in the past, since they offer better wages than other types of manufacturers in Mexico. “When you pay a premium, you get the best,” Mr. Mordue said.þþG.M. provided one of the few bits of good news for Canada when it said in June that it would hire up to 750 people, mostly engineers, to work on software development and research in the country. As with Google and other tech companies, a major attraction was the University of Waterloo’s highly regarded mathematics and computer science departments.þþBut Mr. Mordue said such gains provided little consolation to less skilled factory workers facing an uncertain future. “You can’t replace 7,000 production jobs with 700 software engineering jobs,” he said.þ
Source: NY Times
