This story has been updated with additional information.
General Motors reached a tentative settlement Canadian auto workers by promising $520 million in new investment at the company’s assembly plant in Oshawa, Ontario, and at an engine and transmission plant in St. Catherines, Ontario.
The settlement came just as s strike deadline set for 11:59 p.m. Monday was set to expire, following a lengthy bargaining session during which several key issues were finally resolved, said Jerry Dias, the president of Unifor, the union representing more than 3,900 GM workers in Ontario during a post-midnight press conference.
Dias said the union negotiators met Unifor’s top objective of obtaining promises from GM that will require the automaker major new investments in Canada with C$400 million for Oshawa and another C$120 million for St. Catherines, according to media reports.
“It provides job security for members who haven’t had job security in more than 10 years,” he said.
The new investment promised by GM in the tentative agreement also reverses the flow of automotive investments across North America, which had gone to Mexico during the past decade. In fact, as part of the agreement, GM will actually shift engine production from Mexico to the plant in St. Catherines, Dias said.
However, Dias said the key to the settlement was the commitment by GM to bring a new product into the Oshawa assembly plant outside of Toronto.
“Oshawa will get a new platform that will be able to be used for a truck or a car,” said Dias, who said he would provide more details when he presented the complete contract to Unifor members later in the week. “GM has agreed to hundreds of millions of dollars in Oshawa,” Dias said.
(Strike looms as GM, Canadian workers haggle over deal. Click Here for the story.)
The tentative contract also includes a pay increase and signing bonus, Dias said.
“The agreement will enable significant new product, technology and process investments at GM’s Oshawa, St. Catharines and Woodstock facilities, placing those operations at the forefront of advanced manufacturing flexibility, innovation and environmental sustainability,” he said in a statement.
The new deal is subject to member ratification. The union also plans to push for government support on these new investments, according to Dias.
The union did make one major concession. Going forward, new employees will be eligible for a defined contribution-style pension plan rather than a more lucrative defined-benefit-style pension plan that union members with seniority are now eligible. Capping pension costs was one of GM’s major objectives.
(Canadian auto workers pick GM as strike target. For more, Click Here.)
In return, GM agreed to make 700 temporary workers full-time employees, which Dias described as a major win for the union because it will bolster the union’s organizing efforts at the assembly plants that Honda and Toyota now operate in Ontario.
“Those temporary employees at Honda and Toyota now know the way to get full-time employment is through collective bargaining,” Dias said.
The fallout from a strike in Canada would have spread quickly to GM assembly plant in the U.S. and Mexico, Unifor said as the deadline approached.
Dias has said the negotiations with General Motors, Ford Motor Co. and Fiat Chrysler Automobile are critical to the future of the auto industry in Canada where production has steadily declined over the past 10 years new investment has shifted to Mexico where labor costs are cheaper.
(Canadian auto workers authorize strike for talks with Detroit’s Big Three. Click Here for the details.)
Dias said GM acknowledged the value of its Canadian operations, which have developed a reputation for building high quality products.