Strike Against GM in Canada Nearing an End
Bargainers for the Canadian Auto Workers and General Motors Corp. neared agreement late Monday on a three-year contract that would end a 19-day strike against the giant auto maker.
The two sides negotiated past a noon settlement deadline established by the union as progress was reported on key issues, including the sale of two parts factories and farming out work to nonunion contractors.
“We are virtually there,” said GM spokesman Stewart Low. “There are some Ts to cross and I’s to dot.
Union President Basil “Buzz” Hargrove told reporters at a brief afternoon press conference in Toronto that there had been movement on the key issues, though some important details still were being worked out.
“We’ve come a long way,” Hargrove said. “We’ve still got some tough hurdles to jump.”
Once an agreement is reached, it must be ratified by union members. CAW officials said the voting could be held immediately and striking workers could begin returning to work as early as Wednesday.
The strike began Oct. 2 when GM balked at signing a deal similar to one earlier reached by Chrysler Corp’s Canadian unit. The contract with Chrysler bars plant sales and requires that new jobs be created for any given to outside suppliers.
GM, however, argues that it is far different from Chrysler and Ford Motor Co. and must have the flexibility to sell unprofitable parts operations and to seek cheaper sources for its components.
Wall Street has applauded GM’s tough stance. In anticipation of a settlement, the stock closed up 75 cents at $53.875 in trading on the New York Stock Exchange on Monday.
About 26,000 CAW members are striking GM and thousands of independent parts workers have been furloughed as a result of the strike. GM is Canada’s largest industrial employer and the strike has dampened the nation’s fragile economy.
The strike also is being felt in the United States and Mexico as some GM plants there have run short on key parts made in Canada. As of late Monday, the company had laid off 18,371 workers because of the work stoppage.
The impact of the dispute was muted because GM had stockpiled key parts. Through last week, only one U.S. assembly plant had been idled. But on Monday GM was forced to partially idle four additional assembly facilities.
In the first two weeks of the strike, GM lost an estimated $100 million. The losses could rapidly accelerate to as much as $150 million a week if the strike continued and filtered throughout its North American operations, analysts estimated.
In March, a strike at two brake plants in Ohio idled 26 of GM’s North American auto plants, idling 177,000 workers and causing lost production of 250,000 vehicles. The strike cost GM $900 million, although as much as two-thirds of the loss was recovered later through increased production.
Talks accelerated in Canada after John F. Smith Jr., GM chairman and chief executive, flew to Toronto last week to meet with Hargrove. The meeting restarted serious talks with a resolve by both sides to compromise and settle quickly.
Even as the talks were gaining momentum in Canada, the United Auto Workers and GM continue to quietly negotiate a U.S. contract. While little progress has been reported in the Detroit talks, most analysts believe the negotiations are in a holding pattern awaiting a settlement in Toronto.
The major issue in the U.S. is whether GM will be forced to agree to hold its UAW work force to 95% of its current level, as Ford and Chrysler already have. Analysts say GM must reduce its 216,000-member hourly work force by one-quarter in the next few years to match the productivity of Ford and Chrylser.
“There are still some unresolved issues that remain on the table,” said GM spokesman Chuck Licari, referring to the U.S. talks. “We are trying to chip away at them each day.”
However, he would not speculate on whether a quick settlement could be reached with the UAW once the Canadian situation is settled.
The Canadian dispute has largely centered on job security. The union objects to GM’s sale of two parts plants with 3,400 workers. The CAW said it would only accede to the sale if the workers continued to be covered by the GM contract for the next three years.
