General Motors to Lay Off Over 250 Workers at Ontario Plant

09/21/17 07:29 PM EDT
By Mike Colias 

General Motors Co. is laying more than 250 workers from an engine factory in Canada and trimming production at two U.S. facilities, fallout from a strike at a vehicle-assembly plant that is jeopardizing the supply of GM's top-selling sport-utility vehicle.

The engine facility in St. Catharines, Ontario, near Niagara Falls, makes transmissions used in the Chevrolet Equinox SUV, built at GM's CAMI Assembly plant in Ingersoll, Ontario. About 2,500 workers at the CAMI plant went on strike Sunday night after union negotiators failed to reach a new labor deal with GM.

Between 250 and 300 employees at the St. Catharines factory will be out of work starting Monday, said Greg Brady, president of Unifor Local 199, which represents workers at the plant. That union local operates under a separate contract with GM and isn't on strike.

The strike at CAMI also is having ripple effects south of the border. There will be a "small number" of layoffs at factories in Flint, Mich., and Spring Hill, Tenn., which make small gas engines for the Equinox, a GM spokesman said.

Mr. Brady said formal talks with GM hadn't resumed as of Thursday evening. A GM spokeswoman in Canada said the company is encouraging the union to return to the bargaining table.

Union leaders are worried GM could shift more work to Mexico and are pressing GM to designate the CAMI plant as the auto maker's primary producer of the Equinox. The company laid off about 600 CAMI workers earlier this year when a different SUV model built there was moved to Mexico.

"People are nervous," Unifor President Jerry Dias said in an interview. "The bottom line is we need to stop the bleeding."

The Equinox is GM's No. 2 vehicle by U.S. sales, a key entrant for the company in a fast-growing market segment. Shoppers increasingly are ditching sedans in favor of such crossover SUVs amid lower gas prices and a proliferation of new models.

U.S. sales of the Equinox rose 17% to about 185,000 vehicles this year through August. GM also sold about 17,000 of the SUVs in Canada.

The CAMI plant for years had produced the vast majority of Equinox SUVs. But this year GM introduced a revamped version and expanded production to plants in San Luis Potosi and Ramos Arizpe in Mexico. That gives GM more leverage in its negotiations with the Canadian union, analysts say.

J.D. Power estimates that GM eventually could make up nearly all of the lost production from the CAMI plant -- about 750 SUVs a day -- by boosting production at the two Mexican plants.

Write to Mike Colias at Mike.Colias@wsj.com

 

(END) Dow Jones Newswires

September 21, 2017 19:29 ET (23:29 GMT)

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