Chrysler, GM most at risk if CAW strikes
Grand Caravan, Impala face tightest supplies
Photo credit: BLOOMBERG
Reprints
Print
Respond
DETROIT -- A prolonged strike by the Canadian Auto Workers union could cause U.S. dealers to run out of Dodge Grand Caravans and Chevy Impalas within a month.
The CAW contracts with Ford Motor Co., General Motors and Chrysler Group were scheduled to expire at 11:59 p.m. tonight, and the union has warned that it could strike all three automakers if new agreements aren't reached. As of late Friday, Sept. 14, the CAW and the Detroit 3 had failed to reach agreements.
The agreements under negotiation involve about 20,000 CAW workers at nine component and assembly plants in Canada.
"All three companies appear to be fixated not merely on cost containment but on deep concessions that would have a lasting and severe impact on our members," the CAW said last week in a leaflet distributed to its members.
A triple strike would be unprecedented in Canada's auto sector and would halt Detroit 3 vehicle production in Canada, along with production of engines and other components that are used in both Canadian and U.S. auto plants.
Should the CAW strike the Detroit automakers, inventory levels suggest Chrysler and GM dealers would feel the effects quickest -- though the vehicles in shortest supply are most popular among fleet buyers.
On Sept. 1, GM reported that it had 121,393 unsold Chevy Impalas on dealer lots and in its delivery pipeline, about a 25-day supply. Chrysler reported that it had 131,723 Grand Caravan minivans, a 27-day supply.
Of the 22 nameplates assembled in UAW Canadian plants, only four other vehicles had less than a two-month supply: the Chevrolet Equinox crossover, at 41 days; Chrysler's Town & Country minivan, 49 days; and Ford's Edge and Flex crossovers, at 54 days each.
Other vehicles from Ford, Chrysler, and GM that aren't assembled in Canada could be affected. A CAW strike might temporarily halt some vehicle production in the United States, or at least limit ordering of certain vehicle configurations.
All three automakers have component plants in Canada that provide parts to U.S. plants, including those that produce some of the Detroit automakers' best-selling vehicles.
GM's St. Catharines, Ontario, engine plant, for example, machines and assembles V-8 engines that power versions of the Chevrolet Corvette, which is assembled in Bowling Green, Ky.
Ford's Windsor, Ontario, engine plant produces versions of the 5.4-liter V-8 that are used in the Lincoln Navigator and Ford Expedition, as well as the 6.8-liter V-10 engine used to power SuperDuty F-series pickups. Ford's Essex, Ontario, engine plant produces 5.0-liter V-8 engines that are used in certain versions of the Mustang and the F-150 pickup. All those vehicles are assembled in the United States.
For Chrysler, the stakes might be higher yet. Its casting plant in Etobicoke, Ontario, produces engine mounts, transmission cases and aluminum cross members for most Chrysler products.
As in the United States, not all auto manufacturing in Canada is unionized. Honda and Toyota assemble vehicles in Canada and would be unaffected by a CAW strike.
Canada accounted for about 16 percent of the 10.4 million light vehicles produced in North America in both its unionized and nonunion plants through August. For comparison, Mexico was responsible for 18.5 percent of total production and the rest were produced in the United States.
Chrysler and Ford have said Canada is now the most expensive place in the world to assemble cars. The Detroit 3 want to create a two-tier work force, under which new employees are paid less than current employees, the union said last week.
"The facts are the facts and I think that ignoring them or sweeping them under the carpet is not going to make anybody's life better," Chrysler-Fiat CEO Sergio Marchionne told reporters Friday. "My sincere hope is that we all come to the stark realization of where we are and then we move it on from here."
Among other demands, the companies also want changes to workers' pension plans and the permanent elimination of cost-of-living adjustments, the union has said.
Reuters contributed to this report
You can reach Larry P. Vellequette at lvellequette@crain.com.
