General Motors of Canada Ltd. will increase the number of models to be built at its new car plant in Oshawa, Ont., and pay some workers for as long as four years after its truck plant in that city closes.
Those are among the key elements of a deal between the Canadian Auto Workers and GM to settle the dispute surrounding the closing of the auto maker's pickup truck plant in Oshawa that was announced in June and eliminates 2,600 jobs. Complete details will be revealed to CAW workers in Oshawa today.
One part of the agreement involves GM paying workers who have at least 26 years of seniority 65 per cent of their wages for four years so that they reach the 30-year level, sources familiar with the deal say. Those with between 27 year and 30 years experience would get proportionately less in terms of years.
Reaching the 30-year level enables them to qualify for a special retirement incentive applicable to people with 30 years of experience.
The new flexible car plant GM is building in Oshawa will start producing Camaro muscle cars later this year. As part of the new labour contract reached in May, the company agreed to earmark another car for that facility.
The latest deal adds two more vehicles, which will bring the total number to four and possibly open up some car plant jobs for employees who will be out of work when the truck plant closes.
U.S. industry sources said the car plant will eventually assemble the rear-wheel-drive Camaro, a redesigned front-wheel-drive Chevrolet Impala, a front-wheel-drive Buick model and another vehicle.
GM announced the shutdown of the Oshawa plant, two U.S. sport utility vehicle factories and a truck plant in Mexico in early June amid a collapse in sales.
The surge in the price of gas to more than $4 (U.S.) a gallon, the U.S. housing crisis and the credit crunch sent sales of pickups and traditional SUVs plunging this spring.
Since then, the overall U.S. market has also slumped badly, with sales in June hitting a 15-year low and forecasts that July deliveries will drop even further.
Pickup truck sales are expected to recover, but not to the levels seen before the housing market meltdown.
Just a year ago, the Oshawa truck plant was running on three full shifts and on pace to crank out its usual 300,000 trucks annually.
But last August, GM announced it was eliminating one of three shifts. In April, the company said it would axe the second shift in September. Then in June, GM announced the plant will cease production completely during the third quarter of 2009.
So-called lifestyle buyers, who purchased crew cab pickups with a full backseat and room for a family of five, appear to have abandoned the market for good, analysts say.
Those versions of GM's pickups were a large percentage of the trucks produced in the Oshawa plant.
The Oshawa closing came just weeks after the CAW signed a new contract agreement with GM in which the auto maker agreed to keep the plant open if business conditions permitted, but also to discuss any further production cuts with the union before announcing them publicly.
The company did not discuss the closing with the union before announcing the move, sparking a furious reaction in Oshawa that included a 12-day blockade of the company's Canadian head office.
GM won a court injunction to end the blockade, but an Ontario Superior Court judge criticized the company for what he described as “almost deceitful” business practices.
But GM refused to reconsider its decision to close the plant.
After the blockade ended, union and company officials negotiated a closing agreement that would settle the dispute and the official grievance the union filed against the auto maker.
© The Globe and Mail
