General Motors
was hit with a strike in the North while it was dealing with one further south. Investors barely had time to be alarmed.
Canadian auto workers went on strike against GM (ticker: GM) at midnight on Tuesday, raising the pressure on the car maker as it also copes with the United Auto Workers strike in the U.S. But a tentative agreement was announced on Tuesday afternoon.
The strike included approximately 4,280 auto workers at three GM sites in Canada, according to the Unifor union. The union and the company had failed 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 before the agreement was announced.
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.
The workers went 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 Silverados in the U.S. and Mexico.
Now the strike is over almost as fast as it started.
“When faced with the shutdown of these key facilities General Motors had no choice but to get serious at the table and agree to the pattern,” said Payne on Tuesday afternoon. “The solidarity of our members has led to a comprehensive tentative agreement that follows the pattern set at Ford Motor Company to the letter, including all items that the company had initially fought us on such as pensions, retiree income supports, and converting full-time temporary workers into permanent employees over the life of the agreement.”
Unifor workers will return to the job even before the deal is ratified.
In the U.S., the UAW strike against GM continues. 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 company on Sept. 15. The strike was expanded on Sept. 22 and Sept. 29, though the UAW chose not to expand it on Oct. 6.
Fain gave GM part of the credit for the union’ decision. GM, he said, agreed to treat workers in its 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-parts supplier that has union representation.
GM stock was up 1.6% at $31.47 on Tuesday afternoon.
Coming into Tuesday trading, GM and Ford shares were both down about 21% over the past three months. 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, so 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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