Since there was an escape clause in the contract that allowed GM to close the plant if economic conditions made it necessary Hargrove probably doesn't have much of a legal case. However, this does seem a case of bargaining in bad faith since economic conditions hardly changed that much in a couple of weeks.
Legal remedies are long, expensive, and costly for the union. A strike would punish GM and perhaps bring it to its senses and show other automakers that similar actions will not be tolerated.
AARON LYNETT/TORONTO STAR
Apoplectic CAW president vows automaker won't get away with closing truck plant
June 04, 2008 Tony Van AlphenBusiness Reporter
General Motors of Canada Ltd. has breached a contract by planning to close its Oshawa truck plant next year, union leader Buzz Hargrove charges.
GM confirmed yesterday that it will probably close the plant in the second half of next year because of plunging pickup sales. But Hargrove, president of the Canadian Auto Workers, said that decision clearly violates a contract commitment of less than three weeks ago to keep the operation open.
An angry Hargrove said GM made written commitments for future truck production and a new generation of models at the plant beyond 2011, and is now "illegally violating" those contract terms.
"In my opinion, they can't do that," he said. "If GM can get away with that in a contract, what would stop any other company from doing the same thing and getting away with it?"
The contract states those commitments depend on market demand, but Hargrove said "no intelligent human being" would believe demand could have dropped so quickly in a few weeks to justify the new decision.
Calling GM's move "unjust" and a "betrayal," Hargrove and other furious CAW officials said the auto giant misled union negotiators and workers into ratifying a contract that assured production and future models when the company knew otherwise.
The union charged workers would have never ratified the contract without product commitments.
CAW Local president Chris Buckley said workers overwhelmingly accepted the three-year contract with a wage freeze because of the commitments for future work.
"Can you imagine how our members today feel?" Buckley said. "They're now told by General Motors, `You don't have a job in 2009.' That's absolutely disgraceful of GM."
GM Canada spokesperson Stew Low said the company will not respond publicly to the CAW's comments. "We will discuss the issue privately with Buzz," Low said. "But this situation (of falling demand) has accelerated beyond anyone's expectations. You can't build trucks when there are no orders."
The news of the plant closing came as the industry released May sales figures.
In contrast to the U.S., Canadian sales of cars and light trucks declined about 1,000 vehicles or less than 1 per cent to 184,467 in May from the same 2007 period, according to manufacturers' statistics.
The performance came despite a 20-per-cent plunge in GM and a 6.4-per-cent drop at Ford. Chrysler's sales climbed 6.2 per cent in May.
Meanwhile Toyota and Nissan, which have strong car lineups, posted double digit increases. Honda reported a 2.6-per-cent gain.
Earlier in the day, GM announced it would probably close four North American assembly plants permanently in the next year, including Oshawa, because of a plunge in sales of pickup trucks and sport utility vehicles.
The company blames soaring gasoline prices and tightening credit in a weakening United States economy for a whopping 35 per cent slide in truck sales in the first quarter from the same period last year.
The company's reports show consumers who buy pickups primarily for personal use and not for work purposes are shifting in droves to smaller, fuel-efficient vehicles.
GM has already cut a shift, or 1,000 jobs, at the plant this year. The company plans to reduce production by the equivalent of another shift in the fall before a full closing in the second half of next year. The closing, however, could come sooner if demand continues to deteriorate, according to Troy Clarke, North American Group vice-president for GM.
The 43-year-old plant, which has won international industry awards for productivity and quality, builds the full-size Chevrolet Silverado and GMC Sierra models.
The operation produced more than 316,000 last year, but that will fall significantly this year. In a twist, the closing means GM won't start building much more fuel-efficient hybrid versions of the pickups later this year.
Hargrove said the union is considering its options, including legal remedies, but could not provide details. The union could file a grievance and pursue the issue before the Ontario Labour Relations Board to force GM to keep the plant open, Hargrove suggested.
"We're going to do everything in our power, and we have power, and we'll select our target," he told reporters. "But this is not going to happen without a fight. Our plant will not cease production in the third quarter of 2009."
In response to a reporter's question, Hargrove said the union would not rule out production disruptions.
GM informed CAW leaders of the decision Monday. They spent most of the day and evening trying to get a reversal.
Keith Osborne, the CAW plant chair in Oshawa, noted top GM labour relations officials looked "sheepish" when they told the union of the company's plans.
"I could never trust them again," Osborne said.
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