CAW Strike at GM Canada

10/07/96

Reuters and other news agencies over the weekend reported that 6,000 GM Canada workers were ready to join 15,500 of their colleagues who are already out on strike, unless the company took steps to resolve its conflict with the Canadian Auto Workers union.

As talks neared the CAW-set strike deadline of 11:59 pm last Wednesday, CAW President Buzz Hargrove said that the two sides were "worlds apart" on the major issues of outsourcing and work rule issues. Outsourcing is the practice of taking work out of union workers and giving it to outside plants and non-union sources.

Hargrove warned GM that the union would strike North America's richest carmaker, if it did not reverse decisions to shift work to outside companies, a practice that will cut 5,500 jobs.

Hargrove appeared on television and accused company officials of lying to the public about the profitability of a parts plant that GM has put up for sale. He said the CAW would not back down until GM accepted the contract CAW forged with Chrysler Canada as a pattern agreement. That contract would ban job reductions through outsourcing and place a moratorium on the sale or closing of profitable plants.

"We'll stay out until the pattern is there," said Hargrove. "We are not leaving this bargaining until we have every word that is in the Chrysler job security language." The CAW has announced that its $36.5 million strike fund would last for up to eight weeks, possibly stretching to 16 weeks, if the union mortgages properties. Analysts say GM stands to lose $100-150 million per week, if they don't resolve the strike.

Hargrove announced the strike less than two hours before Wednesday night's strike deadline, characterizing GM Canada's last minute contract offer as an insult to the union and a "total joke."

Hargrove said the deal the company offered was dictated by executives at GM's headquarters in Detroit and that he told GM Canada's lead negotiator Dean Munger that the union thought GM Canada's parent company sunk the negotiations: "I told him (Munger) I thought that the document that he presented tonight was drafted by someone in Detroit that doesn't realize there is a border."

Earlier last week, the CAW approved an escalating strike strategy that put 15,500 of its members on the picket line Wednesday night, augment that number by another 6,000 as of October 6, and completely close operations for the rest of GM Canada's plants by October 9th, putting a total of 28,000 Canadian Auto Workers out on strike.

Hargrove said he spoke with UAW President Stephen Yokich last Thursday and was assured that the UAW would not make any moves that would steal bargaining power from the Canadian union: "He (Yokich) reiterated his commitment. He's not going to put any strike deadline or do anything to take any power away from our bargaining table."

Meanwhile, Canadian government officials and industry analysts are saying that the strike could take a percentage point off the fourth-quarter growth statistics for Canada's economy, reclassifying what has been termed an "economic recovery" for the country.

Douglas Porter, senior economist at Toronto-based Nesbitt Burns Inc., said "the longer it drags on, there will be real losses in production and that will feed into other industries such as transportation, the parts industry, but even the raw materials industry such as steel, plastics, glass."

Although Porter said he estimates that the effects of the strike could "shave fourth-quarter GDP growth by about a percentage point," he also said that third quarter growth in Canada's economy will will buffer it from real problems: "the economy has now gotten enough momentum and the strike by itself won't choke off growth,'' Porter said.

Economists concur, saying a round of aggressive interest rate cuts by the Bank of Canada will help soften the negative impact of the GM Canada strike.

GM announced that the CAW's strike would have no effect on contract talks with the United Auto Workers in Detroit. Last Wednesday GM spokesman Gerry Holmes said talks between company and UAW negotiators continued to make progress: "We're continuing to make progress, and both us and the UAW are working to try to reach a conclusion."

UAW sources said the two sides still disagreed over the issues of outsourcing and employment guarantees.

Paul Dever -- The Auto Channel