GM faces Canada strike, potential hit to truck production

Oct 10 (Reuters) – About 4,300 unionized workers went on strike at three General Motors (GM.N) plants in Canada on Tuesday, threatening the largest U.S. automaker’s profitable full-size truck production.

Unifor said it would go on strike at GM’s Oshawa assembly complex, St. Catharines powertrain plant and the Woodstock parts distribution center, all in Ontario.

GM now faces a potential disruption in production, depending on how long the strike lasts, as workers at the St. Catharines plant make engines for a variety of vehicles, powertrains for the Chevrolet Equinox and Corvette, as well as engine component parts.

At the Oshawa plant, workers build Chevrolet Silverado trucks, one of GM’s most profitable models, while the plant’s stamping operations supply various parts for GM North America.

GM did not immediately say on Tuesday when it expects disruptions from the Canadian strike to affect U.S. auto production.

Wells Fargo said in a research note that the impact was likely wider at St. Catharines, noting “majority of GM’s large SUVs and heavy-duty full-size pickups use the V8 engines. Also, about half of standard full-size pickups use V8 engines, so engine options on these vehicles could be limited if the strike drags on.”

Wells Fargo noted that Oshawa is the smallest of GM’s pickup plants, producing about 2,800 trucks per week. GM shares were up 1.7% on Tuesday.

The walkout by workers came after Canadian union Unifor said GM was “stubbornly refusing” to match the contract the labor union reached with Ford Motor (F.N), which offered wage increases of up to 25% in Canada.

“The company continues to fall short on our pension demands, income supports for retired workers, and meaningful steps to transition temporary workers into permanent, full-time jobs,” Unifor National President Lana Payne said.

Members at the CAMI Assembly Plant in Ingersoll, Ontario, are not on strike because they are covered by a separate agreement.

GM said it would continue talks with Unifor. The walkout adds to the headache faced by the automaker in the U.S. where it is racking up millions of dollars in daily losses to the United Auto Workers (UAW) strike that started Sept. 15.

GM has lost 34,176 vehicles of production since the start of the UAW strike, according to an estimate by Deutsche Bank. The automaker said last week it had 442,586 vehicles in stock.

The UAW has struck two GM assembly plants in the United States and 18 parts distribution centers. GM has laid off 2,300 U.S. workers due to the impacts of the UAW strike.

Unifor has used the “pattern bargaining” approach in its talks, reaching a deal first with Ford and then expecting GM and Stellantis (STLAM.MI) to match. The UAW, on the other hand, broke with that approach under its new leadership.

Unifor represents about 18,000 Canadian workers at Ford, GM and Chrysler parent Stellantis.

Unions have increasingly resorted to strikes across sectors from airlines to automakers, buoyed by a tight labor market and positive public opinion in the U.S., even though union membership has fallen.

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