TORONTO (Reuters) - General Motors Co will cut 625 jobs at its auto assembly plant in Ingersoll, Ontario, by the end of July as it moves some production work to Mexico, the president of Canada’s largest auto workers union said on Friday.
The union blamed the North American Free Trade Agreement and Mexico’s cheaper labor costs for the job losses, which it called unjustified given strong sales of the Chevrolet Equinox crossover and GMC Terrain sport utility vehicle assembled in the southern Ontario plant.
“This came right out of left field,” said Jerry Dias, president of the Unifor union. “This nothing to do with Trump, but it has everything to do with NAFTA.”
U.S. President Donald Trump, who has vowed to renegotiate NAFTA with Canada and Mexico, met with the chief executives of the Big Three U.S. automakers earlier this week, urging them to build more U.S. plants and invest less in Mexico.
General Motors Canada notified Unifor in advance about the labor impact from phasing out older models and shifting production of a new Equinox model, said spokeswoman Jennifer Wright in a statement.
GM has been planning the Terrain move for years, but only recently decided to end assembly of an older version of the Equinox at Ingersoll, said Sam Fiorani, vice president of global vehicle forecasting with AutoForecast Solutions.
The job cuts were somewhat surprising, given GM’s investment of some C$800 million on upgrades to produce a new 2019 Equinox model, said Tony Faria, a University of Windsor professor who studies the industry.
He added that all automakers pare costs where they can, however.
“As companies move their operations, somebody’s going to win within the NAFTA region and somebody’s going to lose. And here’s a case where we lose,” Faria said.
Ingersoll was not part of a four-year labor deal the union negotiated with GM Canada last September, which secured C$554 million ($422 million) of investments for other plants. The Ingersoll contract expires in September, said Dias, who expects negotiations to begin in late summer.
“Everything we’ve been led to understand is that by concentrating the Equinox production on our Ingersoll facilities, everything was going to be fine,” Dias said.
“There is a solution. They should halt plans immediately to shift the Terrain to Mexico.”
GM said earlier in January that it would invest an additional $1 billion in its U.S. factories in 2017 and move some parts production from Mexico to the United States.
Reporting by Susan Taylor and Morgan Sharp; Editing by Chizu Nomiyama and Tom Brown
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