The longer the Chevrolet Equinox strike at the Ontario, Canada, plant goes on, the more it will hurt sales of the Equinox
DETROIT — Workers at General Motors’ assembly plant in Ontario, Canada, say they want a resolution to the contract impasse that has them on the picket line this week.
But GM also has an incentive to make this a short-term work stoppage — fickle car buyers.
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A long-term shutdown at the plant in Ingersoll, Ontario, could mean that consumers looking for a Chevrolet Equinox — one of GM’s hottest-selling vehicles — might not be able to get what they want. Workers in the Unifor union in Canada went on strike late Sunday after union and company negotiators failed to reach agreement on a new contract.
Visit Ron Westphal Chevrolet’s website to view in-stock Equinox models.
Analysts predicted the situation would put pressure on General Motors.
“They build the Chevrolet Equinox at two other plants in Mexico, but they are still ramping up in those facilities,” Joe Langley, associate director of North American automotive production forecasts at IHS Markit. “It is our expectation GM will want to get a deal done quickly since the new Equinox is one of the rare GM vehicles in lower supply and in demand.”
Langley’s firm estimated that GM would lose the ability to make another 872 Equinox SUVs a day, a significant hit and one not likely to be covered by the two Mexican facilities — Ramos Arizpe and San Luis Potosi. The company sold 28,245 Equinoxes last month.
Consumers who want particular colors or options might not be able to get what they want and might be prompted to consider other compact SUVs, such as the Ford Escape, Toyota RAV4 and Nissan Rogue, Kristin Dziczek, director of the industry, labor and economics group at the Center for Automotive Research in Ann Arbor, Mich. The longer the strike goes on, the worse the shortage becomes.
“When you start drawing down inventory levels, you might lose sales because of the lack of choice and the delay in getting exactly what the customer wants,” Dziczek said.
Mike Van Boekel, Unifor Local 88 GM Unit chairperson, said union members had tried to research that on their own recently, being told that it would be an eight- to 10-week wait to get a specific Equinox. He was skeptical that the strike would end quickly, but he said the union is hopeful because the pressure is on both workers and GM.
“We don’t want to lose customers and they want their vehicles so …the clock’s ticking on both sides,” Van Boekel said.
He noted that many workers have families and will struggle financially if the strike lasts for a long time.
“Our members are feeling it, but the clock’s ticking on GM, too,” Van Boekel said.
Michelle Krebs, senior analyst for AutoTrader.com, said job security appears to be the major concern for the union, which has said it is seeking new investment from the company. When production of the GMC Terrain was moved from the plant to Mexico earlier this year, it “shook the union,” she said.
But Krebs noted that while concerns about moving production to Mexico have been an issue, the plant is likely to face competition for new products from plants in Michigan and Ohio that make passenger cars but could be retooled to make SUVs, such as the Equinox. GM, like other companies, is grappling with a consumer shift away from cars and toward SUVs and trucks.
“There’s definitely going to be some adjustments in car production,” Krebs said. “The union’s clearly looking out into the future, and it’s going to have more competition.”
Specific details on what each side had been seeking in the negotiations have not been released, but the union has said it is seeking improved wages and benefits in addition to a new investment from GM.
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