Why Canadians want to boycott GM Mexico and how it is going to end?

Unifor, the Canadian union of workers in the automotive industry, called on consumers to boycott GM to stop buying cars made in Mexico. What do we owe and what outcomes can we expect?

Image: stock photo
Image: stock photo

General Motors is facing a boycott by a Canadian union that could jeopardize sales of more than 600,000 cars a year and could change GM's future plans in the United States, Mexico and Canada. But to understand what is happening, we must go back several months.

Since November of last year, GM announced that it would close a production facility in Oshawa, Toronto, which would result in the loss of 2,600 jobs for members of the Unifor union.

From the point of view of General Motors, this decision is purely mathematical: the market is moving to the electric car and to those who handle themselves; so, to continue investing in this sector, they have to restructure. In fact, GM also announced the closure of 4 plants in the United States and the loss of almost 14 thousand positions, but still nothing concrete.

When the measure was announced, the president of the Unifor union, Jerry Dias, began to press for meetings with the company's representatives. In all of these, the axis was the same: that GM would respect the date stipulated in the contract for the workers of the plant in Oshawa, in the year 2020. After that, they could close the plant. In addition, they offered concrete options to the company to continue operating, according to Dias.

The United Auto Workers (UAW) also participated in these talks to ensure the best conditions for their workers in the four threatened plants in their country. From December it was said that if a satisfactory agreement was not reached, the boycott against the company would be carried out.

Unifor has 310 thousand unionized employees, making it the largest private union in Canada; The vast majority of its employees work in the automotive sector. Its president, Jerry Dias, has criticized the attitude of General Motors, arguing that in Mexico the salaries are of two dollars an hour and 600 thousand cars are produced per year. In fact, in a moment of creativity, he named them Greedy Motors.

According to him, Ottawa supported the company with millions of dollars during the 2009 financial crisis, and he hoped that this support would be reciprocated at this time. On the other hand, he also said that Mexicans, who did not support in any way, would keep the jobs of Canadians and Americans.

The other union involved is the United Auto Workers. For them, 14,000 jobs are endangered by the closure of plants in Michigan, Ohio and Baltimore; In addition, the production of several models will be carried directly to Mexico.

During the last few years, GM has started to move production to plants in San Luis Potosí and Ramos Arizpe, which made the company the largest automotive company in the country, surpassing Nissan. Based on this record, the US union fears that production will eventually move completely. So far, they have not announced whether or not they will join the boycott proposed by Unifor.

In this sense, President Donald Trump also had something to say.

In addition to everything that happens in Canada, GM also wants to close plants in the United States. Of these, the one that has most attracted attention is that of Lordstown, Ohio, where no new production models have been assigned.

Because of the potential closure of these plants, the UAW union and members of the US Congress have attacked GM for months. They have also asked that they not buy Mexican models, but have not reached the stage of organizing a boycott.

But the most notorious critic has been Donald Trump, especially for the Ohio plant. This is one of the key states if he plans to seek re-election in 2020, and has promised for years to bring new jobs. For this, Trump has criticized Mary Barra, CEO of GM, and has said that the company will not be well treated.

Basically, Jerry Dias asked Americans and Canadians not to buy vehicles manufactured in Mexico by General Motors. To identify them, it is enough to check if the VIN (vehicle identification number) starts with 3; If so, they are Mexican cars and should be avoided. The boycott will be carried out, mainly, through television, radio and spectacular.

But the boycott is not against all GM cars. As Unifor is the largest union in Canada, it also represents workers at other plants in the company, such as Ingersoll and Catharines in Ontario, where the Chevrolet Equinox is produced and a propulsion plant is maintained. For this reason, the boycott only refers to these "marked" vehicles.

The Chevrolet Cruze, Blazer, Equinox, Trax, Silverado and Terrain and Sierra vans are produced in Mexican plants. According to Unifor data, 600 thousand cars with a value of 20 billion dollars are exported to Canada and the United States.

On the other hand, GM Canada says that these numbers are inflated. According to them, only 36 thousand vehicles are imported and, out of 47 available models, only three import from Mexico.

According to Dias, from his side, everything possible was done to avoid this decision. He has also said on several occasions that if the boycott does not bring the expected results or, at least, another meeting with representatives of GM, his union will go on strike.

If GM unions and spokespeople agree on anything, it is that auto parts companies in Canada such as Linamar and Martinrea will be the first affected by the boycott. On the other hand, Dias hopes that the measure will not harm the workers.

According to the vice president of GM Canada, the boycott will be especially bad for the Ontario economy. In total, 60 Ontario companies are suppliers of the plants in Mexico.

According to some experts, this measure will not change people's consumption. On the one hand, the Detroit Auto Show said that Canada's Magna could hire employees who lose their jobs if they close the plant, so the public will not feel obligated to support.

On the other hand, as shown by the sales trend of boycotted models, this call is not expected to affect sales, as they are highly sought after by the public.

According to Mark Fields, former Ford CEO, the right decision is being made, at least in business terms, for General Motors. But, due to the support that the automotive plants give to the local economy, closing them always catches the attention of the public and the politicians.

For Fields, the best way to do this type of operation is to tell the whole story: why it's good for the business in the medium and long term and make the public understand why these damaging measures are taken in the short term.

In this regard, GM said it announced the closures so early that the employees of the plant could look for work in other plants in the country throughout 2019.

The original text of this article was published by the Negocios Inteligentes at the following address: https://negocios-inteligentes.mx/por-que-los-canadienses-quieren-boicotear-a-gm-mexico-y-en-que-va-a-acabar/