Supplier Nemak and Unifor, the union representing about 270 workers at the company’s Windsor, Ont., plant, are heading to arbitration in an effort to resolve a grievance regarding the factory’s planned closure.
The two sides couldn’t resolve their issue during two days of talks held this week, leaving an arbitrator to decide how the Mexico-based supplier, owned by Afla, will close the engine-block plant and pay out Unifor members.
Unifor insists Nemak must keep the plant open until the current labour contract expires in 2022. Nemak wants to shutter the plant in mid-2020 because, by then, only 10 per cent of the plant’s capacity will be in use.
“Nemak and Unifor leadership concluded that an agreement could not be reached and the grievance will be heard by the arbitrator,” Nemak said Friday in a statement.
An arbitration hearing is scheduled to begin Oct. 15.
“Nemak firmly believes that it is in full compliance of the collective agreement between Nemak and Unifor and is focused on how best to move forward,” the company said. “During this week’s negotiations, as in the past, the company has continued to express desire and intent to offer our people a fair transition package.”
Nemak employees build engine blocks for a Cadillac vehicle assembled in China, the I-6 engine blocks for the Chevrolet Silverado assembled in Flint, Mich., and the Corvette engine block and bedplate.
Nemak announced the pending closure in July. It said the decision came on the back of “the expected withdrawal from an export program by a client in China,” which would lead the plant to use less than 10 per cent of its installed capacity by 2020. Nemak previously said the Windsor plant is now too small and too inefficient to remain open as the company expands elsewhere in the world. The company says it recently purchased larger businesses outside of Canada that came with existing plants and capacity.
The union claims Nemak always knew the contract in China would expire and that the supplier promised a replacement product in Windsor. Unifor also says it and Nemak "agreed that the Windsor plant would be the sole source for General Motors I-6 engine blocks and engine blocks and bedplates for the Corvette."
As a result of under-utilization in Windsor, that work is being moved to Mexico.
The arbitrator will now rule whether Nemak is breaking the terms of the contract by ending production in 2020.
Unifor staged a 13-day blockade at the Windsor plant, defied an Ontario Labour Relations Board (OLRB) order to remove the blockade and ignored Superior Court Justice Terry Patterson’s ruling to end the standoff. As a result, Unifor paid $89,000 in fines.
Workers returned to work Sept. 16.