General Motors is facing labor unrest on two fronts. It’s a surprise because pattern bargaining typically works for the industry.
Canadian auto workers are striking against GM (ticker: GM), raising the pressure on the car maker as it also copes with the United Auto Workers strike in the U.S.
The strike includes approximately 4,280 auto workers at three GM sites in Canada, according to the Unifor union. The workers walked out, officially at Midnight on Tuesday, after failing to reach a temporary agreement ahead of a deadline at the end of Monday.
“This strike is about General Motors stubbornly refusing to meet the pattern agreement. The company knows our members will never let GM break our pattern—not today—not ever,” said Unifor National President Lana Payne in an emailed statement. “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.”
Pattern bargaining is typically how unions have approached talks with the Detroit Three auto makers GM,
Ford Motor
(F), and Chrysler parent
Stellantis
(STLA). Once an agreement is reached at one auto maker, it becomes the template for reaching an agreement with the other two.
Unifor workers at Ford ratified a new agreement in late September. The margin was relatively thin with 54% of workers voting yes. The deal included base wage increases of roughly 15% to 20% over the life of the three-year contract. It also included “significant increases to retirement programs including raised pension benefit rate and increased contributions,” according to Ford.
“While we have made very positive progress on several key priorities over the past weeks, we are disappointed that we were not able to achieve a new collective agreement with Unifor at this time,” GM Canada said in a statement. “We remain at the bargaining table and are committed to keep working with Unifor to reach an agreement that is fair and flexible.”
The workers are on strike at three facilities in Southern Ontario: The Oshawa Assembly Complex, St. Catharines Powertrain Plant, and Woodstock Parts Distribution Centre. The Oshawa plant builds the Chevy Silverado, one of the most important vehicles for the company. GM also builds Silerados in the U.S. and Mexico.
In the U.S., the UAW is pursuing a different strategy by bargaining with, and striking at, the Detroit Three auto makers simultaneously rather than targeting one to establish a deal to be used in negotiations with the others. Still, once an agreement is reached with one of the three it will become a template to resolve the labor dispute at the other two.
The UAW has now entered its fourth week of strikes at GM, Ford, and
Stellantis.
About 25,000 workers are on strike, out of about 145,000 UAW workers at the Detroit Three. About 4,500 additional workers have been laid off due to disruptions to the manufacturing system caused by the strike.
UAW President Shawn Fain started the union’s strike by walking out at one plant per auto worker on Sept. 15. The strike was expanded on Sept. 22 and Sept. 29. The UAW didn’t expand the strike on Oct. 6. Fain partly credited GM with the decision to hold fast. GM, he said, agreed to treat workers in EV battery plants like its other manufacturing workers. That was a significant concession. GM would have likely preferred unionized battery workers to negotiate a new contract like any auto supplier that has union representation.
GM stock was up 0.5% in premarket trading Tuesday. Strike news always doesn’t impact the stocks immediately. It has an impact, though.
Coming into Tuesday trading over the past three months, GM and Ford shares were both down about 21%. The
S&P 500
was down about 1% over the same span. Stellantis shares were up about 9%.
Stellantis is the most global of the Detroit Three. The U.S. strike affects it less, relatively speaking. Stellantis is also a cheaper stock, trading for less than four times estimated 2024 earnings. GM trades for less than five times. Ford stock trades for less than seven times estimated 2024 earnings.
Write to Adam Clark at [email protected] and Al Root at [email protected]
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