GM was days from closing Cami when strike ended, sources say
Cars leave the General Motors powertrain plant on Glendale Avenue in St. Catharines Monday October 16, 2017. (Bob Tymczyszyn, Postmedia Network)
General Motors was within days of shutting down its Cami Assembly plant in Ingersoll for good when it settled with its striking workers, labour sources said Tuesday.
The automaker notified Cami suppliers last week to prepare “supply lines” to Mexico, where it planned to shift production, said Tim McKinnon, chairperson of Unifor Local 199 at GM Canada’s plant in St. Catharines, which supplies Cami with transmissions.
“It is 100 per cent real. We talked to our suppliers and were given notice to get ready to ship parts to Mexico. Once they start going that way, it is hard to turn it around,” said McKinnon.
Workers at Cami Monday ratified a new four-year collective agreement after a 30-day strike that provides job security language in the form of costly payouts to workers if GM shuts the plant now.
GM told suppliers the strike was costing the automaker $5 million a day and it would not endure that hit much longer, said McKinnon.
“If they had been out another week, that would have been it,” he said.
The 2,800 workers at Cami walked off the job Sept. 17, largely over job security issues. They wanted contract language or a letter giving the plant preferred production status, meaning more of the popular Chevrolet Equinox crossover vehicles the plant makes would be assembled in Ingersoll than in Mexico.
In July, more than 400 workers were laid off at Cami when production of the GMC Terrain crossover vehicle was shipped to Mexico.
Jim Reid, who chairs Unifor Local 27, which represents workers at several Cami parts suppliers, agreed the Ingersoll factory was facing closing.
“They were serious about closing the Ingersoll plant. I am glad we have a deal,” said Reid.
“There were plans in place to shut the whole thing down. They were sending out that message to our people at different plants.”
General Motors has a plant in Coahuila, Mexico, the GM Ramos Arizpe assembly plant, making the Equinox and another plant in San Luis Potosi, which assembles the Equinox and GMC Terrain, among other vehicles.
“They were planning on setting up Ramos for exclusive Equinox production,” and could begin churning out more than 100,000 vehicles a year, said McKinnon.
In addition, the plant in Ramos, as well as GM’s operation in Springhill, Tenn., a former Saturn plant the automaker now uses for overflow production, would have assembled the Equinox.
That threat underscores the importance of the collective agreement workers ratified Monday, since along with wage improvements and lump sum payments, it established financial penalties for GM Canada if it closes Cami.
“It was critical we provided as much job security as we could in that situation,” said Dan Borthwick, president of Unifor Local 88, representing Cami workers.
The deal came together quickly last week, when Unifor negotiators were told Wednesday evening GM was to close Cami if a deal wasn’t reached.
Thursday morning the union abandoned its position wanting guarantees on job security, shifting to a financial penalty proposal.
“We put a plan in place that GM did not like at first, but we came to a common ground,” said Borthwick.
“GM told us if we don’t end this quickly they plan on moving to Mexico. In bargaining, you are always assessing the situation, where you are and you have to make critical decisions fast.”
Cami workers voted 85.9 per cent for the deal. The agreement also gives workers a four per cent wage hike and $8,000 in lump sum payments during the four-year life of the agreement. It also offers a $6,000 one-time bonus for those working from January to the ratification vote, upon approval of the deal.
GM spokesperson Jennifer Wright declined comment on whether GM was ready to close Cami.
“We need to make sure we are satisfying customer orders. We had to explore other solutions,” she said of the deal.
“Our preference was to secure a mutually beneficial agreement and now we are focused on getting back to work.”
Wright noted GM has invested $800 million in new tooling and machinery for Cami in recent years.
The new product launch Cami is just beginning — a new-look Equinox — usually lasts about seven years, she added.
“They have a great run ahead of them, building the Equinox,” said Wright.
As for the job security language, it will cost GM $300 million in worker pay-outs if it closes the plant. Before the deal, that penalty was $40 million.
“It would have hit us hard. We would have lost 300 jobs here,” McKinnon said of Cami closing.
The GM St. Catharines plant now employs 1,300, he said.
“That’s a very productive plant, the highest quality in GM, but these days everyone has to look over their shoulder” about the threat of losing work to Mexico, he said.