Canadian Union to Strike at GM SUV Plant -- Update
September 18 2017 - 12:32AM
Dow Jones News
By Mike Colias
A Canadian union failed to reach an agreement on a new contract
with General Motors Co. and its members will strike, labor leaders
said late Sunday, threatening to crimp supply of the auto maker's
top-selling SUV.
Unifor Local 88, which represents about 2,450 workers at GM's
CAMI Assembly plant in Ingersoll, Ontario, said on its website that
its members "will be on strike" as of Sunday night, after its
contract expired. In a statement, GM said it is "disappointed we
were not able to complete a new agreement" and encouraged the union
to resume negotiations.
The CAMI plant produces the compact Chevrolet Equinox, which
competes in the most popular vehicle segment in the U.S. market.
Equinox sales have been surging as GM winds down production of an
old model and rolls out an all-new version.
The local chapter has said it wants improved wages and benefits
as well as commitments for further investments in the plant that
would bolster job security. GM this year laid off several hundred
workers, though the factory remains one of the auto maker's busiest
in North America.
Crossover SUVs have become a battleground for auto makers as low
gas prices and shifting consumer tastes fuel growth. The vehicles
generally are more profitable than sedans, which have fallen out of
favor in recent years.
While GM invested more than $600 million in the Ingersoll plant
to gear up for the redesigned Equinox that went on sale this
spring, it also moved some production to Mexico, which should give
the auto maker some flexibility should the strike drag out.
GM's U.S. dealers had a 53-day supply of Equinox on their lots
or en route to stores at the end of August, according to
WardsAuto.com. That is relatively thin inventory as the nation's
largest auto maker looks to accelerate the launch of the redesigned
model. The company averaged an 87-day supply across all of its
vehicle lines.
U.S. sales of the Equinox rose 17% to about 185,000 vehicles
this year through August, making it GM's second-highest-selling
product behind the Chevy Silverado pickup. It also sold about
17,000 Equinox SUVs in Canada.
GM executives have said the rollout of the new Equinox and three
other revamped crossover SUV models this year should provide a
profit tailwind.
GM invested more than $600 million in the Ingersoll plant to
gear up for the new Equinox, which went on sale this spring. The
plant for years has strained to meet demand, which was a factor in
GM's decision to also build the vehicle in Mexico.
GM made about 161,000 SUVs at the CAMI plant this year through
July, according to WardsAuto.com.
GM a year ago agreed to a four-year contract with Unifor for its
other Canadian operations, including an engine plant and another
vehicle-assembly facility. The CAMI factory operates under a
separate contract.
The Canadian auto sector has been shrinking in recent years as
auto makers pour investment into Mexico and the U.S., partly to
avoid Canada's relatively high manufacturing costs.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
September 18, 2017 00:17 ET (04:17 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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