Canadian manufacturers keeping close eye on GM strike as it enters day two

September 17, 2019 – Canadian manufacturers say they are keeping a close eye on the strike at General Motors in the U.S. as workers picket for a second day.

More than 48,000 unionized workers in the U.S. walked off the job Monday over issues like wages, health care and job security in the first strike at the U.S. manufacturer in more than a decade.

Industry analyst Dennis DesRosiers said Tuesday that integrated supply chains mean that some Canadian manufacturers will likely already be feeling the effects, though much will depend on how long the strike stretches on.

“There’s an immediate impact on the suppliers in Canada, the Magnas of the world supply GM plants in the United States, and I suspect that as early as yesterday they were getting instructions to stop production and wait until the strike is settled.”

Magna International spokesman Scott Worden said in a statement that the company was in a “wait-and-see” mode and continues to monitor the situation but declined to outline impacts so far.

“Although Magna supplies GM on a number of programs globally, it would be premature to comment on the potential impact to our operations right now,” he said by email.

Fellow parts manufacturers Linamar Corp. and Martinrea International did not respond to requests for comment on the strike.

GM Canada spokeswoman Jennifer Wright said the company continues to monitor the situation and that its Canadian operations are currently running regular production at all sites.

A spokesman for the United Auto Workers said that talks with the automaker are ongoing, but did not say how far apart the two sides were as of Tuesday morning.

Jonathon Azzopardi, chair of the Canadian Association of Mold Makers, said secondary suppliers won’t feel the immediate impacts as much as direct parts suppliers, but they are concerned about the potential long-term effects.

“What we are concerned about is potentially a situation that create a snowball effect,” said Azzopardi.

He said that if the strike has a significant impact on profitability, it could mean less money to invest in new programs and vehicle platforms that boost manufacturers like mould makers.

GM workers in the U.S. last walked off the job for two days in 2007, while a strike in 1998 lasted 54 days.

This strike could drag on because workers have much more leverage thanks to recent company profitability, compared with the difficulties the industry faced in 2007, said Azzopardi.

“That’s why this strike could get ugly, because the last time we had this type of situation, the leverage was heavily on the side of the auto manufacturers, this time not so much.”

He said the strike comes at a delicate time for the industry as auto sales are expected to slow from recent peaks, and that the strike will only make things worse.

“When you start to put disruptors in like this, it makes it that much more fragile.”

DesRosiers said he doesn’t expect this strike action to drag on too long.

“I think calmer heads ultimately prevail and that this will be a relatively short situation.”

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He said, however, that if forecasters are correct and auto sales continue to slide then it will make next year’s negotiations between Unifor and GM even tougher than the current U.S. negotiations.

Unifor president Jerry Dias said Monday that Canadian GM workers could strike next year as workers feel “betrayed” by the company.

GM is ending production at its Oshawa assembly plant later this year at a loss of 2,600 union jobs, though the company plans to convert part of it into a parts assembly operation to save about 300 positions.

News from © The Canadian Press Enterprises 2019