General Motors workers represented by Canadian union Unifor ratified a four-year contract with the automaker that includes $421 million in investments (C$554 million) and a key change to pension plans for new hires.
About 65 percent of workers approved the contract, Unifor said in a statement on Sunday. About 67 percent of production workers voted in favor of the deal, compared with 57 percent of skilled trades workers.
“The gains made in this agreement are historic and more than what has been achieved in the past 10 years,” Unifor President Jerry Dias said in a statement. “Unifor has shown what is possible when workers have a union, and a united bargaining committee to speak on their behalf."
FCA deadline set
Unifor will now resume negotiations with FCA, where investments in the Brampton, Ontario, assembly plant will likely take center stage. Negotiations with FCA will be patterned off the deal with GM. Unifor has set a tentative strike deadline of Oct. 10.
“In the negotiations with GM, the union set clear objectives which we reached, including our top priority to secure investment and product for our members and the future of the auto industry,” Dias said. “With Fiat Chrysler and Ford we will accept nothing less."
The deal includes 2 percent wage gains for hourly workers in Year 1 and Year 4 of the contract. Workers will receive a $4,561 (C$6,000) signing bonus, in addition to annual $1,520 lump sum payments in Year 2 through Year 4 for legacy workers.
The deal includes $304 million (C$400 million) in investments at the Oshawa assembly plant, which will receive product commitments for its flex line.
"This mutually beneficial new agreement will enable new product, technology and process investments that will preserve jobs and place our Canadian operations at the forefront of advanced manufacturing flexibility, innovation and environmental sustainability," GM said in a statement.
GM said it is "in discussions" with the federal and Ontario governments to discuss "potential support agreements to help optimize the competitiveness" of its Canadian operations.
"Further details on our plans will be shared after completion of our discussions with governments," GM said.
According to a source who attended the Unifor Local 222 meeting, union leadership told workers that the Oshawa plant will receive unfinished Chevrolet Silverados from Fort Wayne, Ind., for final assembly, confirming a report last week by Reuters. A highlights brochure handed out to employees says the investments include the “implementation of a new flexible assembly module” that will allow GM to “meet unmet demand in a critical market segment."
The plant will also continue production of the Cadillac XTS and Chevrolet Impala, according to the brochure. Its consolidated line will close in 2017, Dias said last week.
The Oshawa plant was identified by Dias as the factory most in danger of closing and in most dire need of new investment. Unifor made securing product at Oshawa and other Detroit 3 plants its top priority in negotiations in the face of increased competition with Mexico and the southern U.S. for auto manufacturing investments.
The deal includes $114 million (C$150 million) in investments at the St. Catharines engine and transmission plant, according to the brochure. The investments include a “next generation transmission module” and an “additional variant, introducing the latest technology for fuel efficiency, into [an] existing module,” the brochure reads.
Dias said last week that the St. Catharines plant will receive production from Mexico under the contract.
The contract further includes $3 million ($C4 mllion) in investments at the Woodstock, Ontario, parts distribution center to “improve material flow,” Unifor said in the highlights brochure.
One notable concession from Unifor in the agreement is a new defined-contribution pension plan for new hires. The plan requires employees to contribute four percent of their earnings to the pension plan, an amount to be matched by GM. Workers can elect to contribute another 1 percent of their pay to the plan, in which case GM would contribute another 2 percent.
Pension plans for legacy workers will remain unchanged.
Temporary workers will immediately be placed onto the same 10-year wage ladder new hires are on. The "supplemental workforce employees" would start at the beginning of the new-hire wage scale, meaning it would take them 10 years to catch up to the base rate of $25.96 (C$34.15) per hour.
Wages for new hires begin at $15.90 per hour, up slightly from $15.58 under the previous contract. Wages will increase each year under the 10-year progression. Under the previous contract, wages were frozen for the first three years.
According to the brochure, GM will hire “up to 50 apprentices” combined for the Oshawa and St. Catharines plants. Unifor says it also “negotiated a procedure to allow Skilled Trades to put forward a business proposal to pull back work that GM had planned to contract out."
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