It isn’t what Unifor's leadership was hoping for, but the new four-year labor contract at CAMI Assembly in Ontario is as good as they were going to get.
The contract, ratified by 86 percent of the plant’s voting workers on Monday, ended a month-long strike at the plant, which builds GM’s hot-selling Chevrolet Equinox crossover.
The new deal fails to meet Unifor’s top priority: Securing a commitment from GM that would designate CAMI as the lead producer of the Equinox.
It was a demand Unifor leadership took all the way to top GM executives in Detroit. But GM refused, apparently threatening to move all Equinox production out of Canada south to Mexico, where the crossover is also already built at two plants.
In a letter distributed to workers on Monday, Unifor President Jerry Dias said the union “decided that we could not, in good conscience, ask for more economic sacrifice” from its members and settled with GM.
It was the right move, in all likelihood. As I noted when the strike began last month, neither Unifor nor GM had much of an early incentive to back down from their respective positions.
GM ultimately proved to have more leverage as time went on.
Obviously, the company has complete autonomy in deciding where its products get built. And in an increasingly global marketplace, GM has apparently determined it needs the flexibility to shift more Equinox production to Mexico, where labor costs are a tiny fraction of Canada’s and from where it can more easily ship products thanks to the country’s plethora of free-trade agreements.
This is not to say Unifor secured nothing for its members. Production workers will see their wages rise 4 percent over the life of the deal, from C$34.74 per hour ($27.75 USD) to C$36.12 by September 2020. The deal also includes a C$6,000 bonus ($4,793 USD) and C$8,000 in lump sum payments over four years.
The Income Security Fund at the plant also rises under the deal from C$190 million to C$290 million, a move Unifor local leadership said would make it costlier for GM to close the plant. And workers near early retirement age can grow into GM’s retirement program if the automaker closes the plant.
Even for a company that generated $166 billion in 2016, that’s nothing to sneeze at.
But the contract does little to change the plant’s long-term viability because it fails to address the central issue: Mexico remains an extremely attractive place for GM to assemble its vehicles. The company’s decision to move GMC Terrain production out of Ingersoll to Mexico earlier this year and it ramping up Mexican Equinox production proves as much.
Barring a surprising development in NAFTA renegotiations or the health of the global economy, it seems unlikely that Canada will be seen as significantly more attractive to GM and other automakers in four years.
As a result, CAMI workers should expect a similar fight over the plant’s future in 2021. And they probably can’t expect a much different response.
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