UPDATE 1-Canadian union says it will not back down on GM strike

UPDATE 1-Canadian union says it will not back down on GM strike

Reuters  | Oct 12, 2017 14:00

UPDATE 1-Canadian union says it will not back down on GM strike

By Susan Taylor

TORONTO, Oct 12 (Reuters) - The Canadian union leading a month-long strike at a General Motors Co (NYSE:GM) GM.N plant in Ontario is refusing to make concessions to settle the matter, even after the U.S. automaker threatened to move all production to Mexico.

Contract talks at the CAMI plant, which stalled over job security and sparked the first strike at a Canadian assembly plant since 1996, have idled production of GM's popular Equinox sport utility vehicle.

The union, called Unifor, will not withdraw its demand that the largest U.S. automaker pledge to keep Equinox production in Canada, said Unifor President Jerry Dias said on Thursday.

"GM, at some time or another, is going to have to make a commitment to Canada, it's going to have to make a commitment to the United States and they can't continue to shift our jobs to Mexico," Dias told Reuters on the sidelines of NAFTA talks in Washington.

It is not possible to cut Canadian costs below those of Mexico, where workers make $2 an hour, Dias said.

GM Canada was not immediately available for comment.

The issue, escalating just as Canadian Prime Minister Justin Trudeau discusses the North American Free Trade Agreement with U.S. and Mexican leaders, also coincides with GM's plan to scale back production and jobs at a Detroit assembly plant later this month. [nW1N1MD018 government of Ontario urged both sides on Thursday to immediately resolve the high-stakes dispute.

"I feel like we're engaged in a poker game, but the interests of Ontario are sitting on the table right now," Ontario Economic Development Minister Brad Duguid told Reuters.

"We'd really like to urge the parties to find a resolution to this as quickly as possible, before permanent damage is done."

GM HAS 'CAPACITY ISSUE'

Some 2,500 workers at a factory in Ingersoll, Ontario, walked off the job on Sept. 18 after GM rejected the Unifor labor union's call for the automaker to designate the factory as the lead production site for the Equinox in North America. has a capacity issue in North America and they need to close a plant. This could be the path of least resistance. It's no more complicated than that," said Susquehanna International Group auto analyst Matthew Stover.

On Wednesday, GM warned Unifor that it would start winding down production at the CAMI plant and ramp up Equinox output at two plants in Mexico unless workers called off their strike. must discuss the issue with the United States and develop a strategy to stem the "influx" of vehicles from Mexico, Dias told reporters in Washington.

The strike is also badly hurting the CAMI plant's supply chain. Dias estimates some 30,000 workers are feeling the strike's impact.

GM has invested $800 million to retool the CAMI plant and is projected to build about 210,000 vehicles in 2018, according to AutoForecast Solutions, a forecasting firm. The two GM Mexico plants are together projected to build 149,000 vehicles next year.

"They made a major investment in this plant, so I would expect that GM is going to want to get their investment back," Dias said. "But is there a long-term threat? The answer is absolutely yes."

Ontario has not provided any funding to CAMI in the last 10 years, a spokesman for the province said.

The Equinox was the second best-selling model in the United States Chevrolet lineup in September, and GM had just 41 days' worth of the vehicle in stock at the end of last month, according to Automotive News.

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