GM’s $1 billion investment hinges on Unifor ratification, Canada support

Note: All dollar figures in this story have been translated into U.S. dollars at current exchange rates.

General Motors’ plans to invest up to $1 billion in its Oshawa plant in Canada to resume vehicle assembly is contingent upon securing incentive funding from the federal and Ontario governments, according to a contract highlights sheet published by Unifor on Sunday.

This mirrors other major investments planned for Ford Motor Co. and Fiat Chrysler Automobiles assembly plants in recent weeks. Ford will receive $453 million from the governments for a planned $1.4-billion investment in its Oakville plant, while FCA has made securing funding a requirement for its plans to invest up to $1.1 billion in its Windsor factory across the U.S. border from Detroit.

During a news conference on Thursday, Unifor President Jerry Dias said he has been in contact with Prime Minister Justin Trudeau’s office, Ontario Premier Doug Ford and various ministries in both governments.

“I believe everyone certainly wants to be a part of the solution,” he said.

A federal spokesperson said the government has been “engaged in discussions with labor and auto manufacturers on an ongoing basis.” A request for comment from an Ontario government spokesperson was not immediately returned.

About 1,600 GM workers represented by Unifor were set to vote on the agreement starting Sunday at 11 a.m. ET. Workers have 24 hours to vote, and results are expected to be known midday Monday.

Under its tentative three-year contract with Unifor, GM plans to build light-duty and heavy-duty Chevrolet Silverado and GMC Sierra pickups at Oshawa starting in 2022. The plans represent a significant win for the union’s leadership, which has sought the return of vehicle assembly to Oshawa since it ended in 2019.

The plans would also allow for GM to build more pickups as consumer demand for trucks remains high, even during the COVID-19 pandemic. Three other North American plants that currently build the Sierra and Silverado have largely been running on overtime since the trucks’ 2019 model-year redesigns, according to AutoForecast Solutions LLC.

Most of the workers who will vote on the contract are employed at GM’s St. Catharines, Ont., assembly plant, which would receive $84 million in investments under the agreement. Under the agreement, the plant would receive transmission work for the Chevrolet Corvette and would continue V-6 and V-8 engine production, as well as becoming the sole source for gasoline engines for light-duty trucks built at Oshawa.

‘Future product allocation’

According to the contract highlights sheet, GM said St. Catharines is “well positioned to be considered for future product allocation and commits to explore and consider potential product programs and investment opportunities” there.

Unifor had sought new product for the plant in order to maintain jobs there. Those jobs are secure over the life of the agreement, though the union acknowledged in a Thursday update to members that the commitments it secured “do not resolve questions regarding the future of the plant.”

“Nevertheless, the Company signaled to the Union that these investments are a major vote of confidence in a plant that is unrivaled in terms of product quality,” the Nov. 5 post reads, saying the “modest investments” in the plant would “sustain work, create stability” and position the plant for the future.

The contract follows the pattern set by deals with Ford and FCA, according to the highlights sheet.

Workers would receive a $5,566 “productivity and quality” bonus on Dec. 17 if the contract were ratified. Two lump-sum bonuses of $1,535 are planned for December 2021 and December 2022.

Production workers at the full pay rate would receive a 4 percent lump sum bonus in 2021 of the contract, as well as wage increases of 2.5 percent this year and in 2022.

Skilled-trades workers would receive raises of 30 cents per hour in the first and third years of the contract in order to reinstate a 20 percent base wage differential with production workers.

Wage increase, retirement incentives

Like the FCA and Ford deals, the GM contract would reduce the wage grow-in period for new hires to eight years. Employees would also be paid a higher percentage of the full pay rate during each year of the grow-in period than they do under the current contract.

GM said it would offer $31,000 lump-sum retirement incentives for up to 40 employees at St. Catharines and 10 at its Woodstock parts distribution center in early 2021. It also said it would offer retirement packages worth up to $54,000, along with a $15,400 vehicle voucher, in the event of indefinite layoffs that do not result in recall.

Under the agreement, no retirement incentives would be offered to workers at Oshawa Assembly, meaning workers would be laid off in the event of a permanent job cuts, the union said. In that scenario, workers hired before 2020 would return to the aftermarket parts operation in Oshawa based on seniority.

As with the Ford and FCA deals, the two sides have agreed to meet for a business review each quarter, up from once per year.

“The parties agree to review company product plans and business forecasts, including on electric, autonomous, connected vehicle and component parts development,” the highlights sheet reads.

In a highlights sheet for members of Local 222 in Oshawa, Unifor said GM would institute “alternative work schedules” at Oshawa.

“The Company will develop the most optimal shift schedule in order to help reduce utilities cost. If running a one-shift operation, the Company will have the ability to structure the shift start and end times to avoid high peak time utility costs,” the highlights sheet reads.

The Woodstock facility would receive $384,000 for “facility sustainment” under the contract.  The deal does not include CAMI Assembly in Ingersoll, Ont., which is on a separate contract that expires in 2021.

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