Skip to main content

Newly built cars sit in a shipping lot near General Motors Car assembly plant in Oshawa.

© Mark Blinch / Reuters/REUTERS

General Motors of Canada Ltd. is offering special buyouts at its assembly plants in Oshawa, Ont., in a bid to get higher-paid, long-serving workers off the payroll and potentially replace them with employees who will earn lower pay and less generous benefits.

Canadian Auto Workers local 222 in Oshawa has agreed to expanded use of supplemental work force employees at a plant that is scheduled to be closed next year, after the union fought a tough battle in negotiations with GM Canada last fall to limit the use of such employees.

The move comes as the union struggles to convince General Motors Co. to commit to producing new vehicles at the plants beyond 2016 when production commitments made to the federal and Ontario governments expire. The union tried to win promises of new vehicles for Oshawa during the fall negotiations, but GM stood firm.

Story continues below advertisement

But the union lauded one provision of that agreement – limits on the use of supplemental work force employees in the Oshawa plants.

Now, however, the union has agreed to a plan that involves GM Canada offering $50,000 incentives and $20,000 car vouchers to entice 350 of about 1,300 employees eligible to retire to do so.

The agreement is aimed at positioning the plant for future product allocation; opening up jobs off the assembly line that are coveted and require years of seniority to get; and allowing senior workers to better plan their retirement dates.

About 70 per cent of any employees hired to replace those who are retiring will be supplemental work force employees, said Ron Svajlenko, president of CAW local 222. Those workers are paid about $23.90 an hour – compared with $34.15 for employees with six years' seniority – receive fewer benefits and are not eligible for pensions.

They were originally permitted by the CAW as temporary workers hired to help with vehicle launches, but the union claimed last fall that GM Canada was abusing the process.

Any other new employees hired would come under a new provision agreed to last fall that provides a starting rate of $20.50 an hour and a progression to the full rate over 10 years. Employees hired under that provision are also eligible for a hybrid defined contribution and defined benefit pension plan, but they would receive no pension plan in Oshawa as part of the deal reached between local 222 and GM Canada.

That's in part because any jobs that open up will be on the consolidated assembly line at the Oshawa plant, which is scheduled to close next August.

Story continues below advertisement

"It's great for us to actually roll out there and generate pensions, but we're not in a situation where I can tell these people they're going to be working for the next 29 years," said Mr. Svajlenko, who noted that he hopes the decision to close the consolidated line can still be reversed.

Some of the jobs could be open as early as August, while others could be available as late as next April, which means some employees could work for just four months if the consolidated line closes as scheduled and no jobs are available at the neighbouring flex plant.

GM Canada said it had reached a memorandum of understanding with the union but would not discuss details of the agreement.

"To be competitive in this global market, there is no finish line for improving our products and processes," a GM Canada statement said.

There are about 600 people working on one shift at the consolidated plant turning out a version of the Chevrolet Impala for the fleet market. The flex plant employs about 2,900 people who are assembling a new model of the Impala, as well as the Cadillac XTS, the Buick Regal and the Chevrolet Camaro. Camaro production will be shifted to a plant in Lansing, Mich., in 2015.

Report an error Licensing Options
About the Author
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More


The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨