Layoffs begin, factory shutdowns imminent in Ontario auto-parts industry as GM strike in U.S. drags on

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Layoffs in the Ontario auto-parts sector have begun, as talks continue to end a strike by 49,000 General Motors Co. auto workers in the United States.

The layoffs in southwestern Ontario by a trucking company that delivers parts to GM facilities are expected to be followed by more as the United Auto Workers’ shutdown of more than 50 auto-assembly plants and warehouses in nine states drags on.

Dave Cassidy, president of Unifor Local 444 in Windsor, said about 100 truck drivers at Martin Transportation Systems have been laid off as a result of the strike, with more to come at suppliers and GM’s Ontario plants.

Jerry Dias, national president of Unifor, said 800 union members could be laid off by Monday at GM’s St. Catharines plant, which makes engines and transmissions for GM plants in Canada and the United States. As many as 1,400 workers at GM’s Oshawa plant face “imminent” layoffs because the truck components they assemble come from the United States, he said in a telephone interview.

GM and the UAW resumed talks on Tuesday in a bid to end the automaker’s first U.S. strike since 2007.

GM, which has about 7,000 employees in Canada and operates three major factories in Ontario – in Oshawa, Ingersoll and St. Catharines – continued to run its assembly lines on Tuesday. But “there is more risk to there being an impact the longer the strike continues,” said Jennifer Wright, a spokeswoman for GM Canada.

Martin Transportation did not respond to an e-mail request for comment.

The interconnected nature of the North American auto industry means a shutdown in the United States will quickly lead to a lack of supply or demand for parts or vehicles at other plants, including those in Canada and Mexico.

Ms. Wright said any shutdown of an Ontario plant would swiftly affect Ontario’s auto-parts sector, which produces components for GM and other car makers in Ontario and the United States. The province’s auto-parts companies, including Magna International Inc., Linamar Corp. and Martinrea International Inc., employ 100,000 people and export $18-billion in components to the United States a year. GM in the United States accounts for as much as 30 per cent of this.

Ms. Wright declined to say for how much longer the Ontario GM plants would be able to operate while the U.S. workers are on strike.

Mr. Cassidy of Unifor said the Ingersoll plant should be able to operate for a week or so, but the St. Catharines power-train plant, which sends much of its output to the idled factory in Flint, Mich., can operate for only another couple of days before shutting down. “We’re totally interconnected,” Mr. Cassidy said.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said parts makers are not yet worried about losing sales volumes, but are planning to make up lost production with extra weekend shifts once the strike ends.

“There is anxiety because you’re not in the room; you don’t know” when the strike will end, he said.

The Oshawa assembly line, slated to close in December, employs 2,200 hourly workers who make Chevrolet Impalas and finish U.S.-made pickup trucks. GM’s power-train factory in St. Catharines employs 1,100 hourly workers. Most of the engines from the plant are shipped to the United States while most of the transmissions are sent to the nearby Chevrolet Equinox assembly line in Ingersoll. About 2,400 workers are at the Ingersoll plant, which relies on U.S.-made engines to assemble the Equinox SUV.

Magna, Linamar and Martinrea International did not respond to interview requests.

GM said on Sunday that it offered pay raises and US$7-billion worth of U.S. factory investments resulting in 5,400 new positions, a minority of which would be filled by existing employees. The company also said it offered higher profit-sharing, “nationally leading” health benefits and a US$8,000 payment to each worker upon ratification.

Before the talks broke off, GM offered new products to replace work at two of four U.S. factories that it intends to close.

With files from Associated Press

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