BUSINESS

Gearing up for the long haul at GM

There is no sign the strike will end soon

TOM FENNELL October 21 1996
BUSINESS

Gearing up for the long haul at GM

There is no sign the strike will end soon

TOM FENNELL October 21 1996

Gearing up for the long haul at GM

BUSINESS

There is no sign the strike will end soon

As Ray Bourre sees it, the price stickers pasted on car windows in his Sudbury, Ont., Chevrolet showroom speak volumes about the

strike that has paralyzed General Motors of Canada Ltd. With most of the automakers’ models selling for more than $20,000, shoppers often become discouraged by the price and refuse to buy. Bourre, the sales manager of Crosstown Chevrolet, stands to lose thousands of dollars if the strike drags on and his supply of new vehicles dries up. He sympathizes with GM, which says it must cut costs by contracting out work that is now performed by union members because it can no longer keep passing cost increases on to price-resistant consumers. “I don’t want to take sides,” said Bourre. “But I can see the sticker shock in the showroom.” The struggle over the outsourcing issue showed no signs of ending soon. “We are worlds apart,” said Canadian Auto Workers president Buzz Hargrove after he left a brief meeting with GM’s chief negotiator at the Royal York Hotel in downtown Toronto. ‘Within a matter of minutes we were yelling at one another.” They were arguing over GM’s plan to sell a fabrication plant in Oshawa and a trim plant in Windsor that together employ more than 3,500 people. The union wants GM to keep the plants, and to back their demands, 13,500 workers went on strike in Oshawa and Ste-Thérèse, Que., on Oct. 2, and last week they were joined by 9,600 workers at factories across southern Ontario. With its Canadian operations completely shut down, GM factories in New York and Michigan that ship parts to Canada laid off 1,800 workers. With the strike expand-

ing, the owners of small businesses that cater to GM and its workers were beginning to feel the bite. GM laid off 1,400 workers at its SteThérèse plant last year. And Aristos Karafotis who owns a deli across the street from the plant says he cannot stand to lose any more business. “I wouldn’t want this to continue.” Over the summer in Canada and the United States, GM prepared for a walkout by stockpiling parts and boosting production to 1.26 million vehicles—17,000 more than the company had previously stated it would build in the July-to-September quarter. The company lost $1.2 billion earlier this year

when the United Auto Workers staged a 17-day strike over outsourcing at a brake plant in Ohio. The Canadian standoff is expected to cost GM $50 million a day in profits. But the company is determined to alter its cost structure, a drive that started after GM lost more than $10 billion in 1991. GM chairman Jack

Smith last week vowed to continue that effort: ‘We’ve got certain things that will cripple the company if we don’t get it right.” Smith’s warning, however, drew only defiant laughter from the striking workers at GM’s plants. “We’ll go to the end,” said Adrien Desjardins, outside of the SteThérèse plant. The workers also appear ready for a prolonged struggle. They have erected shelters out of plastic sheets to protect themselves from the weather and many have made arrangements with their banks to forgo mortgage payments until the strike ends. As he deposited a cheque into the GM Workers Credit Union across from the plant,

Larry Wood, who works on the line, said the next few weeks will be difficult. ‘We were told to save some money,” said Wood, “but it’s going to be really tough on families with young children.”

Drivers of GM cars in need of repair may also soon feel the effects. GM’s national parts distribution centre in Woodstock, Ont., is shut down, meaning GM dealers could soon have difficulty finding parts for cars that are brought in for service. “I’m

more worried about parts than inventory,” Bourre said.

Dennis Verspeeten and his employees have already been hit. Shortly after the strike began, Verspeeten sent home 350 of the 400 drivers he had under contract at his Oshawa-based trucking company. ‘We could be put out of business if the strike

continues,” Verspeeten said. “It’s even worse for the drivers who are out of work now.” People in the small retail sector are hurting. Peter Mancini opened his first Pete’s Pizza shop across the street from GM in St. Catharines in 1984, and now has eight outlets. If the GM strike continues, he said, he will be forced to close some of his outlets. St. Catharines Mayor Alan Unwin fears that GM could pull out of the area altogether—a concern shared by the citizens of SteThérèse. Said Unwin: “It’s a nightmare.” It will not end anytime soon.

TOM FENNELL