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GM Exploring Alternatives for Equinox Production Amid Strike

Oct. 12, 2017
Up in Canada, GM is trying to negotiate a collective bargaining agreement while the Unifor union seems to be more focused on negotiating a trade agreement.

General Motors Co. is looking at alternative plants for production of the popular Chevrolet Equinox SUV as a strike at a Canadian factory drags into its fourth week.

The company is at an impasse with striking workers at the plant in Ingersoll, Ontario, and feels that it has no choice but to start exploring other locations, said a company official who asked not to be identified amid the negotiations. The Equinox, which was just redesigned this year, is also produced at two plants in Mexico.

GM is trying to negotiate a collective bargaining agreement while the Unifor union seems to be more focused on negotiating a trade agreement, the official said. While most of the economic issues are resolved, according to GM, the main sticking point is Unifor’s demand that the Ingersoll plant be designated the lead producer for the Equinox, meaning any production cutbacks would affect Mexico first.

Unifor President Jerry Dias has said repeatedly that the strike represents everything that’s wrong with the North American Free Trade Agreement, which is currently being renegotiated. Nafta was implemented in 1994, bringing Mexico into the flow of tariff-free auto trade on the continent. Canada lost more than 53,000 automotive jobs from 2001 to 2014, according to the Automotive Policy Research Centre at McMaster University in Hamilton, Ontario.

Jobs Shift

Meanwhile, Mexico has beat out Canada and the U.S. to win at least eight of nine North American vehicle assembly plants announced between 2011 and 2016, according to the Center for Automotive Research. In January, GM shifted production of the GMC Terrain to Mexico from the Ingersoll plant, costing about 400 jobs.

“Does trade have everything to do with this? Yes, of course it does,” Dias said in a phone interview. “This is what the whole fight is all about, this is about fixing a colossal disaster of a trade deal.”

The 2,500 hourly workers at Ingersoll have been on strike since Sept. 17, in the first walk-out at a Canadian assembly plant since 1996. GM recently spent C$800 million to retool the plant, which it says is one of its most productive, for the 2019 model of the Equinox.

The GM official said no final decisions have been made on Equinox production and the company still sees a “window for resolution” if it can solve the remaining issues, but emphasized that time is running out.

Dias said the strike appears set to drag on a while longer.

“This thing is going to get ugly before it gets better but GM can’t just declare war on everybody and think they can get out of this unscathed.”

By Kristine Owram

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Licensed content from Bloomberg, copyright 2016.

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