Unifor President Jerry Dias said the strike at General Motors' Ingersoll, Ontario, assembly plant could play out for "quite a while."
He could be right. Neither side has much incentive to move from its position.
Dias said "major philosophical differences" between the union and GM have made securing a deal impossible, forcing the roughly 2,750 workers at CAMI Assembly to strike.
Dias and other union leaders see this round of negotiations as critical to the long-term survival of the CAMI plant, which assembles the hot-selling Chevrolet Equinox but lost production of the GMC Terrain to Mexico this year. About 400 people were laid off as a result, with another 200 or so taking early retirements.
Unifor wants CAMI to be designated as the primary producer of the Equinox in North America and a new product commitment to replace the Terrain -- moves the union says would prevent more Canadian jobs from being lost to lower-wage Mexico. GM apparently is having none of it.
Union leaders know a strike could hurt GM in the long term. The Equinox is GM's best-selling entry in a booming and profitable crossover segment. The strike will result in the loss of about 750 Equinox crossovers each day, according to LMC Automotive, though it notes that GM can shift some production to Mexican plants in the short term during a strike.
They also know they need to secure production now while the U.S. remains just below its all-time sales peak and Canadian sales continue to rise. It is impossible to say what the market will look like in four years, but it seems almost certain that it will not be as strong as it is today. There is little reason for Unifor to punt investment talks to the next round of negotiations.
And if Dias, who is heavily involved in North American Free Trade Agreement talks, wanted a villain to scapegoat for NAFTA's problems, it helps to have one as large as GM. When NAFTA renegotiations resume this weekend, expect Dias to point to CAMI as another example of a Canadian auto plant and its workers potentially losing out to Mexico because of the agreement.
The bad news for Unifor, of course, is that the Equinox's shift to Mexico has begun. Two Mexican plants began assembling the Equinox in April, and GM could ramp up production there during the strike. (Overflow Equinox production used to be done at GM's Oshawa, Ontario, assembly plant.)
Manufacturing decisions are not made on a whim, and it is unlikely that production will return to Canada anytime soon.
And while Dias is right that it would be easier for the union to secure investments now while the market is strong, the fact remains that U.S. auto sales are entering a downturn. Major investments at Canadian and U.S. plants are far less likely as a result. GM won't commit to build more of its products unless market conditions demand. And it would need to be assured the new product at CAMI would be profitable.
It's easy to see why the two sides remain so far apart. The question is how long it will take to bridge that gap.