General Motors Co. will invest $675-million in its Canadian operations in the next four years under a deal reached with the Canadian Auto Workers union Thursday.
The deal extends by one year the life of a car-assembly plant in Oshawa, Ont., that was scheduled to close next year and adds a new shift of workers at a neighbouring plant. That means GM's employment level in Canada should be roughly the same as it is today – or about 7,000 people – in 2016.
The Oshawa plant closing would have eliminated 2,000 jobs beginning later this year.
"We resisted aggressive attacks against our members," Chris Buckley, chairman of the union's GM bargaining committee, told reporters Thursday night after a tense day of negotiations. "This is a victory considering everything we were faced with."
Additionally, about 1,400 jobs will be saved at an engine and transmission plant in St. Catharines, Ont. Under the bailout agreement with the Ontario and federal governments in 2009, GM did not commit to engine production at the St. Catharines plant beyond this year, but has promised to continue it until 2016.
The talks also came close to collapsing over the issue of whether GM was prepared to meet the terms of a deal the CAW reached on Monday with Ford Motor Co.
The GM deal averts a strike that would have shut the two Oshawa plants and one in St. Catharines, which supplies several U.S. assembly operations. A strike would have cut off the flow of Chevrolet Impala and Camaro and Buick Regal and Cadillac XTS cars immediately and quickly affected production of Chevrolet Corvettes and other models made at U.S. plants.
The tentative agreement with GM leaves Chrysler Group LLC as the remaining member of the Detroit Three without a new contract.
CAW president Ken Lewenza said he has won promises of job commitments from Ford and GM and now he expects Chrysler to commit to continue operating on three shifts at its Windsor, Ont., minivan plant and a large car-assembly plant in Brampton, Ont.
Chrysler has been the most rigid in the talks, sources said, in insisting that the CAW accept essentially the same terms approved last year by the United Auto Workers in the United States.
Talks with GM were more advanced than those with Chrysler in what is known as pattern bargaining, where an agreement with one company sets the standard on wages and other economic issues for the other two companies.
All three auto makers entered the talks insisting that hourly labour costs at their Canadian plants had to be cut to match those at their U.S. operations.
Industry analysts said this week that the Ford deal, which includes a four-year wage freeze and reductions in pay and benefits for newly hired employees, will not raise the auto maker's labour costs in Canada, but it was not clear yet if those costs will be reduced.