Picketers stay cool under umbrellas outside an entrance to GM’s Cami plant in Ingersoll, Ont. on Sept. 18 2017.Fred Lum/The Globe and Mail
The number 46,100 is relatively small when it comes to vehicle production in North America, but it's significant when it comes to the strike at the General Motors Co. plant in Ingersoll, Ont., that began late Sunday night.
That number is how many Chevrolet Equinox crossovers have been produced at two plants in Mexico since GM began making the vehicle in that country earlier this year to supplement the main source of the Equinox, which has been the Cami plant in Ingersoll for more than a decade.
But it's also a sign of how GM has changed the balance of power versus Unifor, which represents the 2,800 workers now on strike. If Cami was the only plant making the Equinox – as it has been for much of the vehicle's history – GM would have been reluctant to let production of one of its hottest-selling vehicles cease, even temporarily.
Read more: Changing NAFTA won't stop auto-job exodus to Mexico: officials
Equinox sales soared 85 per cent last month and inventories dropped to 53 days supply, compared with 74 in July, according to data compiled by consulting firm AutoForecast Solutions LLC.
The fact that GM would permit a plant making its key entrant in one of the fastest-growing segments of the market to be shut down, coupled with the shift in production of the GMC Terrain to Mexico from Cami earlier this summer, puts Unifor on notice that the auto maker has other options and it is prepared to use them.
"This is GM sending a signal and I think showing that they have a little more leverage, at least in the near term," said industry analyst Jeff Schuster, senior vice-president of consulting firm LMC Automotive.
Unifor president Jerry Dias doesn't disagree with that analysis, but points out that the strike underlines that Canada has lost and Mexico has won when it comes to the North American free-trade agreement and the auto industry.
"This plant is the poster child for what is wrong with NAFTA," Mr. Dias said on Monday. NAFTA allows duty-free shipment of vehicles within Canada, the United States and Mexico if 62.5 per cent of the content is from North America.
That provision of NAFTA has helped turn Mexico into a global auto-making powerhouse that has attracted billions of dollars of new investment by auto makers in recent years.
Mr. Dias noted that Cami is one of the most productive plants in the GM network in North America and despite that, has already lost 600 jobs because of the shift of the Terrain out of Cami. The plant has been operating well above capacity with three shifts of Unifor members working six days a week for eight years.
Vehicle production hit a record 351,722 at the plant last year, almost eight times the number cranked out by the two Mexican plants this year, DesRosiers Automotive Consulting Inc. data show.
"The loss of 600 people in the most productive plant in the world tells you that under the current NAFTA arrangement, nobody is secure," he said.
The shift in Terrain production led the union to make job security its key demand in talks that broke off Sunday night.
The union asked GM to designate Cami as the lead plant for Equinox production, which would put the Ingersoll operation first in line for any new investment when it comes to redesigning the vehicle in the middle of the 2020s. The Equinox was redesigned for the 2017 model year and GM invested about $500-million at Cami.
Mike van Boekel, who is Cami plant chairman of Unifor local 88, said GM negotiators wouldn't touch the issue of job security.
"They say they have two plants in Mexico [where workers make] $3 an hour and if they want to move the product, they'll move it," Mr. van Boekel quoted them as saying during the weekend talks. Workers at Cami are paid about $32 an hour.
In Canada and the United States, the cost of direct labour involved in the assembly of a vehicle represents about 7 per cent of the total cost of production.
No formal negotiations were scheduled in the dispute late Monday, but union officials said they were having informal discussions with the auto maker, which issued a statement late Sunday urging union negotiators to return to the bargaining table.