TORONTO (Reuters) - Production at General Motors Co’s (GM.N) Oshawa, Ontario, plant slowed to a crawl on Monday as a strike at Lear Corp (LEA.N) cut off supplies of car seats used in vehicles assembled there, the Canadian Auto Workers (CAW) union said.
Talks between Lear and the union were set to continue Monday afternoon, though the CAW said the two sides remained far apart and that the Oshawa plant may grind to a halt on Tuesday without an agreement.
“I can’t see them running tomorrow. They would not have the seats to do that,” said Chris Buckley, president of CAW Local 222 at Oshawa.
About 400 workers at Lear’s plant in Whitby, Ontario, went on strike on Sunday after talks broke down over company requests for contract concessions, the CAW said. The union represents workers at both GM and Lear.
GM said it expects production at Oshawa “will be affected early this week” and that it is working to limit the impact.
“GM Canada is hopeful that Lear will reach a resolution with the CAW,” said GM spokeswoman Adria MacKenzie, without giving details of GM’s plans to deal with any disruptions.
A spokesman for Lear was not immediately available for comment.
The union said it cut all-in labor costs, including taxes, vacation, by C$14 an hour in its last contract with Lear three years ago, when the global financial crisis endangered the auto sector’s future. It declined to say where total labor costs currently stand.
Now that Lear is a healthier company, workers deserve to share that success, the union argued. But in talks that began August 7, the company has insisted that any reward or bonus workers receive be balanced by cuts.
The union is not seeking wage increases, Buckley added, but wants to maintain cost-of-living adjustments.
There are about 4,000 assembly line workers at GM’s Oshawa plant, and 1,500 auto parts workers in surrounding plants, he said.
Lear’s Whitby factory produces and ships car seats to GM Oshawa for assembly in Impala, Buick Regal, Cadillac and Camaro models, the CAW’s Buckley said.
Buckley said the seats cannot be sourced elsewhere, but GM Canada could not immediately confirm that.
A halt in production could affect a host of other GM Canada parts suppliers such as Johnson Controls Inc (JCI.N), Syncreon and Woodbridge Foam Corp, Buckley said.
In another dispute, 65 unionized workers who make exhaust manifolds at Wescast Industries Inc WCSa.TO - also represented by the CAW - went on strike Saturday morning.
Parts made at Wescast’s Strathroy, Ontario, plant are included in GM’s Gen IV engines produced at its St. Catharines, Ontario, plant. The engines power Silverado and Sierra models assembled in the United States and Mexico, said CAW national representative Jim Woods.
“We hope that there’s not going to be any disruption,” of supply, Wescast Chief Executive Ed Frackowiak told Reuters.
“Under the labor laws, we have the right to continue to make parts in that facility by using our salaried staff and that’s what we intend to do,” he added.
The union said the strike was caused by GM’s recent decision to move future Wescast production of the exhaust manifold to China. GM did not respond to a request for information on the move, and Frackowiak said he was unaware of such a decision.
Wescast is also seeking tough concessions, Woods said, including permanent two-tier wages. New hires would get C$14 an hour, while current workers get about C$23 a hour, he said.
“The main issue here is that we are trying to get that facility competitive,” Frackowiak said.
“That’s the only solution, long term, for us to be able to win new business, whether it’s General Motors or somebody else, to keep that place going.”
Talks began in July, one month after Wescast agreed to be acquired by China’s Sichuan Bohong Industry Co Ltd in a deal that has not yet closed.
Wescast shares fell nearly 5 percent on Monday, down 43 Canadian cents at C$8.30 on the Toronto Stock Exchange.
Reporting By Susan Taylor; Editing by Frank McGurty, Peter Galloway and Jeffrey Benkoe