A settlement of the three-week strike by the Canadian Auto Workers against General Motors Corp. paves the way for the automaker and the United Auto Workers to reach a deal soon on a new labor pact.
The independent CAW reached tentative agreement Tuesday on a contract for its 26,300 workers at GM of Canada Ltd. The deal went before those workers today for expected ratification.
The strike shut down GM of Canada Ltd., and 19,159 GM workers at U.S. and Mexico plants that depend on Canada-made parts remained laid off today. Assuming the contract is ratified, it could be two or three weeks before all those workers return to work, said a GM source who spoke on condition of anonymity.
Officials at GM's Town of Tonawanda engine plant don't yet know when they will be calling back the 550 employees who were idled for more than two weeks due to the Canadian strike.
When the workers return will be determined by whether CAW members approve the tentative agreement and then how fast GM can restart its operations north of the border, said Marilynn Rowe, spokeswoman for the Powertrain division, which includes the Tonawanda engine facility.
An additional 500 local engine personnel resumed their jobs Monday, to fill orders for assembly plants that had run out of engines.
But it will take time for the Canadian plants to produce and ship the parts that other plants need before they can bring all their workers back.
In the meantime, additional layoffs are expected.
GM said today that 1,830 laid-off parts workers were called back to work in Mexico, but that 1,058 were laid off at parts plants in Mexico, Flint, Mich., and Mansfield, Ohio. GM also said its Lordstown, Ohio, assembly plant will have at least its third shift laid off starting Friday. The plant produces the Chevrolet Cavalier and Pontiac Sunfire twins.
The UAW and GM have continued talking throughout the strike and have reached an accord on many issues, sources say. But the UAW held off the final push on the remaining details while it waited for the Canadian strike to play out.
"The UAW and General Motors are very, very close to signing an agreement," said analyst Ronald Glantz of Dean Witter Reynolds Inc. "I expect the UAW to sign within two weeks without any labor disruptions."
UAW and GM spokesmen in Detroit declined to speculate on the talks, but said meetings resumed today at GM headquarters.
The key issue here, as in Canada, is outsourcing -- the practice of farming out parts work to outside, lower-cost suppliers.
CAW President Buzz Hargrove said his union won GM's promise not to farm out any jobs, except for the planned sale of two parts plants in Ontario. But the CAW pact also includes exceptions for jobs replaced by new technology or restructuring to increase productivity.
The union originally demanded that GM not sell the plants. It instead got a guarantee that workers who remain at the plants after they are sold will retain GM wages and benefits for the contract's three-year term. Buyout packages also will be offered to workers who want to leave.
GM chief negotiator Dean Munger said the deal was good for the automaker, which had pushed hard for cost-cutting provisions in a new contract. Hargrove called it a precedent-setting pact.
But many analysts said that while the deal appeared fair for both sides, it contained nothing surprising.
"I don't think it's really what you would call a landmark agreement, considering the fact they had to go out on strike to get it," said Dale Brickner, a labor professor at Michigan State University.
In its recent contracts with Ford Motor Co. and Chrysler Corp., the companies agreed to guarantee 95 percent of their current union jobs for the next three years, with some major exceptions for productivity gains and an economic downturn.
Analysts expect the UAW and GM to agree to the same 95 percent provision, but with workers at several major parts plants excluded from GM's base work force.
GM already has listed for sale two Delphi Automotive Systems plants in Michigan, in addition to the two in Canada, and has said it may sell several more if they fail to meet profit goals.
The world's largest automaker was able to withstand the CAW strike because it stockpiled Canadian parts.