February 21, 2019 / 12:02 PM / 3 months ago

Canadian auto union faces Catch-22 in General Motors fight

TORONTO, Feb 21 (Reuters) - Jerry Dias, the leader of Canada’s auto union, is unsparing in his rhetorical attacks on General Motors Co’s decision to close its Oshawa, Ontario, assembly plant and lay off thousands of union workers by year-end.

But when it comes to action, Unifor’s president has been far more circumspect.

Dias promised “drastic measures” to compel GM to extend production of sedans and pickups, including the Silverado, to Sept. 21, 2020, when the current labor contract expires.

For more than a century, GM’s complex in Oshawa, a city east of Toronto, has been an economic engine for Ontario and Canada, anchored by thousands of highly paid manufacturing jobs.

After GM’s November announcement of a broad restructuring, including Oshawa, the union backed brief production disruptions, a call to boycott GM’s Mexican-made vehicles and a “solidarity” concert for workers by British musician Sting.

But Dias has not yet deployed the biggest weapon in his arsenal – a general strike to fully halt production of Silverado and Sierra pickups, vital to the Detroit automaker’s profitability.

Dias concedes there is mixed support for a walkout among union workers. Some Oshawa workers fear that shutting down GM Canada would hurt them much more than the company.

Unifor represents 2,600 assembly-line workers at GM Oshawa and 1,800 workers at plants supplying the Oshawa operations, whose contracts typically have lower pay, benefits and security. Some 1,500 work at feeder plants that are entirely reliant on Oshawa.

That is a sharp drop from the mid-1990s, when Unifor’s predecessor union counted 14,750 hourly members in Oshawa.

“We’re working in the GM plant, but we’re not GM,” said Sheri Steel, a forklift driver at CEVA Logistics. “Whenever GM shuts down, we do too. We get sent home and we lose pay.”

Strikes can be a “dangerous tactic” when plants face closure, and could drive GM to an earlier exit, she said.

Workers are pressing for talks on closure terms, which can improve on guaranteed worker provisions in a contract, said CEVA local Chairperson Keith Poulin. Unifor has declined those requests, saying it intends to keep the plant open, he said.

“We live paycheck to paycheck,” said Poulin’s wife, Jean Poulin. More than seven years ago, the couple were hired by companies supplying the GM plant for C$14 an hour.

Over time, their wages rose to C$20.50, but the 51-year-olds say that with limited severance, no pension and no savings, they cannot afford to retire.

“With a mortgage and bills, we are scared,” said Jean, who delivers parts for Syncreon Automotive.

‘THEY DON’T SCARE ME’

Some union members are nervous about their future, Dias told Reuters in an interview, but he is not. “They’ve got a lot of power,” he said of GM. “But they don’t scare me at all.”

Unifor has laid the groundwork for tougher action. It charged GM with breaking terms of the 2016 collective agreement, committing it to keep Oshawa open until the deal ends in 2020. It filed a grievance that is proceeding to arbitration.

GM Canada says the agreement notes that market conditions may arise beyond the company’s control. “The union has also been aware since 2016 that Oshawa truck production was temporary and ending in 2019,” said spokesman David Paterson.

So far, GM Chief Executive Mary Barra has refused to retreat from her restructuring plans despite criticism from U.S. President Donald Trump, Canadian politicians and unions in both countries. She has also declined to meet with Dias.

“We have a lot more cards to play,” Dias said. “But I’m not going to find a solution playing solitaire.”

Dias has looked for support from his U.S. counterparts in the United Auto Workers union. The two unions, which broke apart more than three decades ago, discussed cooperating on their campaigns to save plants, but provided no details.

In the past 23 years, there have only been two autoworker strikes in Canada, said Unifor’s director of research.

“We used to have strikes at every round of bargaining among auto assemblers right from the beginning in 1937,” said Bill Murnighan. “But Canada now has a very low number of strikes compared to past eras and compared to other countries.”

A GM THAT CAN SAY NO

GM’s decision to end production at Oshawa and four U.S. plants is emblematic of a global shift, as automakers restructure and invest in next-generation vehicles, including electric and self-driving cars. With North American sales projected to flatten or decline, automakers are also wary of maintaining unnecessary capacity in the region.

Politicians on both sides of the border have reminded GM that the U.S. and Canadian governments rescued it with public money a decade ago.

After contributing more than C$10.5 billion to the 2009 GM bailout, the Canadian and Ontario governments sold their final equity stakes in 2015. A set of financing commitments, including domestic production, expired one year later, GM’s Paterson said.

Trump has threatened to cut all GM subsidies, a tough stance that Unifor has asked Canadian officials to adopt. But politicians from Ottawa and Toronto have taken a more moderate approach, saying there is nothing more they can do without GM’s cooperation. Dias calls their response inadequate.

“That couldn’t be further from the truth. ... We have been having conversations repeatedly,” said a federal government official. “I don’t think the solution is just throwing money at the company.”

The provincial government agrees.

“We’ve asked many, many times - and offered all kinds of different things - What can we do, as the government of Ontario, for you to change your mind?” said Economic Development Minister Todd Smith. “And the answer has always been: ‘Nothing.’” ($1 = 1.3176 Canadian dollars)

Reporting by Susan Taylor in Toronto; Additional reporting by David Ljunggren in Ottawa; Editing by Joseph White and Peter Cooney

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