Unifor's Jerry Dias makes case for Ontario with GM's Mary Barra

Jerry Dias, president of auto workers union Unifor, came away from a meeting with General Motors CEO Mary Barra without a commitment to new auto models to be made in Oshawa, but with greater optimism about GM's future in Canada.

Dias said he made the case for not just keeping, but expanding production in Ontario, in his meeting with GM’s top executives on Tuesday.

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"Am I more optimistic than I was yesterday, the answer is yes. Is there still a lot of work to do, the answer is yes," he said in an interview with CBC’s The Exchange with Amanda Lang.

The company and its Canadian union agreed to further talks, he said.

"The discussion was about opportunities, rather than challenges. It’s the first discussion we’ve had with General Motors about opportunities in a long time," he said.

New models?

Dias pressed GM to announce new models for the GM plant, which the automaker pledged to keep open until 2016 under terms of its 2009 bailout.

GM Canada CEO Stephen Carlisle has said no final decision on replacing those vehicles will be made until late 2016, when the costs have been studied and a new contract is in place with Unifor.

Analysts are pondering whether lack of a commitment means GM is contemplating pulling out of Canada altogether. In any case, it could mean a long downtime for the plant as it retools for a new model.

The Oshawa plant employs about 3,600 Unifor members and helps create spinoff jobs in autoparts across Ontario.

Dias says both the low dollar and the competitive wage rates Unifor has already negotiated for new hires create a competitive environment for GM.  

"Oshawa is the most flexible plant that GM has globally. If you take a look at the advantages we have here in Canada – universal medicare, a Canadian dollar that’s sitting at 80 cents, labour rates that are cheaper here than in the U.S., this is a great place to do business," he said.

"On top of that, we won all the awards for the most competitive, best quality plant that they have anywhere on the globe, so we should be the frontrunner."

Under the four-year contract, new hires start at 60 per cent of the regular hourly rate of $34 and take 10 years to reach parity.

Dias says Canadian wages work out cheaper than those in the U.S., including the right-to-work states.

"The starting in wage for a new GM worker is $20 an hour. We have shown an argument where over the next six years, which is the life of a product cycle, they’ll save $350 million on Oshawa alone," he said.

Aging workforce

In addition, many of the workers in GM’s Oshawa and St. Catharines plants are due for retirement, meaning there is potential for a much cheaper workforce as new hires are brought in.

Camaro production moves from Oshawa to Lansing, Michigan at the end of this year, which could mean the loss of up to 1000 jobs in the Oshawa, Ont. plant.

Dias said he made suggestions to GM that could help save some of those jobs, including ramping up production of the Impala and the Equinox. 

Canada’s share of North American production of cars and light trucks has fallen to 14.1 per cent in 2014 from more than 17 per cent in 2009, as investment in Canada by the big automakers declines.

Canadian light vehicle production climbed slightly last year to 2.382 million units, according to auto analyst Dennis DesRosiers.

Mexico, with 18.9 per cent of production, has overtaken Canada, formerly a powerhouse in the industry.

"You’re not going to compete on labour costs [in Mexico]," Dias said,

GM has committed $3.6 billion, on top of the $1.4 billion already invested, to double their production in Mexico

"The issue becomes that in Mexico, they never contributed one dime to the bailout of GM and Chrysler. I do believe without any doubt that General Motors has an obligation to American and Canadian workers," he said.