BUSINESS

Inking an auto truce

Thousands of union jobs could still be lost

BARRY CAME November 4 1996
BUSINESS

Inking an auto truce

Thousands of union jobs could still be lost

BARRY CAME November 4 1996

Inking an auto truce

BUSINESS

Thousands of union jobs could still be lost

The outcome of the vote was never in doubt—not even before the ballots were counted. Striking autoworkers in Quebec made that much clear as they filed into a cavernous hall last week in a suburb north of Montreal to issue a verdict on the agreement negotiated earlier between General Motors of Canada Ltd. and the Canadian Auto Workers union. “I think we’ll have to endorse it,” remarked Richard Fournier, president of the 1,500-member CAW local at GM’s sprawling plant in Ste-Thérèse. The rank and file clearly agreed. When the votes were tallied, 90 per cent of the local’s production workers and 97 per cent of those in skilled trades accepted a new three-year pact with the giant automaker. “It might not be the best deal, but it’s a good deal,” conceded Fournier. “Above all, we’ve proved that while the machines belong to GM, the jobs belong to us.”

The union’s 25,000 members outside Quebec shared the same view. Like their colleagues in Ste-Thérèse, close to 90 per cent of the CAWs workers in factories across Ontario also voted last week to accept the new contract with GM, bringing to an end a bitter, three-week strike that paralyzed assembly lines and parts suppliers across the continent, idled more than 45,000 workers not only in Canada but also in the United States and Mexico, and likely cost the Canadian economy hundreds of millions of dollars. And now the union is turning its attentions to Ford Canada, the last of the Big Three automakers yet to bargain for a new collective agreement. Talks are scheduled to begin this week. And even though a tentative strike deadline has been set for Nov. 6, few industry analysts expect a walkout. Fewer still are anticipating negotiations to be as gruelling as those at GM. ‘We’ve already cut the cloth,” said CAW president Buzz Hargrove, alluding to the earlier deals with Chrysler and GM. ‘We’ve got all the pieces, we just have to put the glue on. Hopefully, we can do that without a strike.”

For both the union and the company, the strike boiled down to jobs. GM wanted to cut staff by purchasing more parts and supplies from outside contractors. In turn, the CAW wanted to enshrine the idea of “job ownership,” by forcing GM to retain as many workers as possible as it cuts capacity. In the end, analysts said neither side scored a direct victory. ‘They negotiated the best deal they could realistically hope for,” said Nicholas Lobaccaro, an auto analyst at Bear Stearns & Co., an investment bank in New York City. “There was no room for a big win.”

The CAW not only forced the carmaker to back down on an outsourcing plan that would have cost almost 800 jobs in Ontario and Quebec, but also to restrict the practice over the next three years. In return, the union agreed to allow GM to sell two Ontario plants—a fabrication plant in Oshawa and a trim plant in Windsor—that together employ about 3,500 people. Once the plants are sold, workers at the two factories will still get the same benefits, pension and income as other GM workers until 2005. Beyond that date their future is far from certain, which is probably the principal reason why Hargrove declined to gloat about the terms of the new pact. “I’ve been careful not to call it a victory because there’s a lot of people who are still faced with incredible insecurity,” he said.

In fact, a number of GM plants may close down when the three-year agreement runs out. High on a list of likely candidates to be closed in the near future is an engine and brake plant in St. Catharines, Ont., which employs 600 people. ‘We were able to keep the plant open for another three years,” said Hargrove. “But in spite of that, several hundred people are still worried about their jobs.”

Similar concerns face the autoworkers at Ste-Thérèse. Half of the plant’s workers were laid off a year ago as a direct result of declining sales of GM’s Firebirds and Cámaros, the two vehicles produced at the Quebec operation. Both cars are scheduled for redesign in 1997 and GM maintains that production will continue until at least 2000. But not even the workers at Ste-Thérèse harbor any illusions about the future of the facility if the market for the once-popular muscle cars continues to shrink once the three-year period of grace in the new contract has expired. “It’s not hard to foresee future important strikes,” admitted CAW Quebec director Luc Desnoyers, underlining the critical nature of the battle against further outsourcing by GM.

For GM, which is still trying to rebound from one of the worst financial debacles in corporate history when it lost $10 billion in 1991, the new deal will give it the flexibility it needs to restructure. As part of that plan it wants to cut more than 32,000 workers from its labor force of 225,000. Said Dean Munger, GM Canada’s chief negotiator: “The agreement provides General Motors with the opportunity to run its business so we can improve ourselves.”

Despite the union’s long-term concerns, however, the autoworkers can point to immediate gains in the new pact. In an effort to ease the transition of those effected by the coming downsizing, GM is offering a $42,500 buyout for workers eligible for retirement as well as guaranteeing the same wages and benefits for three years and the same pension benefits for nine years. The agreement also grants GM workers the same wage increases and benefit improvements as those granted Chrysler employees—including two-per-cent increases in each year of the three-year contract and cost-of-living increases. An assembly worker now earns about $22 an hour, but a ban on mandatory overtime will allow the worker to decide when he wants to put in extra hours. But as they toil on the line, many still know that time is running out on their jobs.

BARRY CAME