Canadian Auto Workers concerned about Impala production in Detroit

Ken Lewenza, the President of the Canadian Auto Workers’ union told Bloomberg in a telephone interview that the announcement of Impala production in Detroit “creates a sense of nervousness” for workers at GM’s Oshawa Ontario production facility. Lewenza expressed concern in there being enough demand for the Impala to warrant building the car at two production facilities but a representative for GM has stated that the Canadian production commitments made prior to these recent US production announcements are still going to be met, with 16% of GM’s North American production coming from Canadian plants.

The Canadian Auto Workers’ concerns are not unfounded, as GM is investing a fortune in local plants to allow them to build their most popular vehicles right in their backyard. Along with the Chevrolet Malibu (which is also slated to be built at the Detroit Hamtramck plant), the Impala is General Motors’ bestselling car so there appears to be demand in the immediate future but should the demand for the Impala begin to shrink; you would have to think that the first plant to slow production would be the Oshawa facility. The next generation Impala and Malibu will be built alongside the Chevrolet Volt and its European cousin, the Opel Ampera.

One issued that could complicate things for workers at the Oshawa Ontario production facility is that their contract with General Motors expires in 2012. The CAW has reportedly stated that they would not accept a two-tier wage system similar to the one used between GM and the American UAW. Under that system, new entry level hires come in at $14 an hour and the more seasoned workers get $28 an hour. However, the current payment system for the Canadian Auto Workers has the average worker making around $35 an hour with new hires getting roughly 70% of that ($24.50), but those new workers can get up to the average within five years. The Canadian Auto Workers’ refusal to play ball with GM could have an impact on GM’s relationship with the Canadian labor union but if they don’t like it – those workers could always start building Canadian cars.

Source: Bloomberg

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