The Case Situation: GM axing 625 jobs at Ontario plant, shifting some production to Mexico

General Motors is cutting 625 jobs at its assembly plant near London, Ont.,as it shifts some production to Mexico.

Mike Van Boekel, spokesman for Unifor Local 88, says the layoffs will take effect in July at the CAMI Assembly plant in Ingersoll, Ont.

That plant was excluded fromnegotiations last fallbetween Unifor and the Big Three automakers, including GM. The CAMI plant is scheduled to have its own negotiations with its roughly 3,000 workers later this year.

"This decision reeks of corporate greed," Unifor's national president Jerry Diassaid."It is not based on sales, it is another example of how good jobs are being shifted out of Canada for cheaper labour in Mexico, and Unifor will not let it happen without a fight."

Earlier this month, GM announced it wouldmoveTerrain production to Mexico from the Ingersollplant, but boosting production of another vehicle, the Chevrolet Equinox, with the newfoundcapacity at the CAMI plant.

"It was previously announced with employees that the next generation GMC Terrain will be produced outside of CAMI," GMspokeswoman Jennifer Wright said. "We have confirmed the production location to be Mexico."

In an interview with CBC News, Unifor Local 88 presidentDan Borthwick said when the Terrain news was announced, it was the union's understanding that no jobs would be lost in Canada as a result.

"Our understanding [was] that we had sufficient production in the future and we would not be incurring any layoffs," he said. "Within a week or two weeks we get this horrible news this morning that 600 members would be laid off."

GM says it told union

GM disputes that version of events, sayingin a statement it "provided Unifor advanced notification of labour impacts related to product changeovers and transition at its CAMI facility."

"We continue to work with our Unifor partners to manage through the adjustment with all measures available to us within the collective agreement," Wright said, adding that the site is expected to remain a three-shift facility "depending on demand for this new generation Equinox."

Asked for comment, NavdeepBains, Canada'sminister of innovation, science and economic development,said the government is "concerned about the impact of job losses on workers and their families and our thoughts go out to those affected."

"We remain optimistic about the strength and future of Canada's automotive industry," Bains said.

'We're uncompetitive," Ambrose says

Speaking to reporters after a caucus meeting in Quebec City, interim Conservative leader Rona Ambrose said the incident speaks to the need for more government action.

"We don't lose jobs south of the border or to Mexico because we don't have free enough trade," she said, "We lose them because we're uncompetitive."

"Whether it's labour costs, or energy costs people believe that they can't do business and there isn't an environment to do business," Ambrose said.

The move comes against the backdrop of a new administration in the U.S. that hasthreatened to tear up NAFTAand slap a punitive tariff oncompanies that make cars outside the U.S. in places like Mexico, which makes about two million cars a year bound forthe U.S. market.

The non-partisan think-tank Center for Automotive Research recently estimated thattearing up NAFTA would directly cost 31,000 U.S. auto manufacturing jobs

The Assignment

Groups are to assume the role of GBC BUS1038 consultant to Jerry Dias, Unifor's President. Using the knowledge you have gathered thus far in the program, help Jerry Dias in his negotiation with GM.Specifically, try to figure out what actions he may need to take to help stop or mitigate some or all of the downsizing

Format

1. Introduction

including situation background.

1. Analysis

a)Explain the reasons behind downsizing of employees by General Motors (GM) by July 2017?

b)Outline some of the contradictory statements in this story that might lead to legal issues?

c)Use Maslow's Hierarchy of Needs Theory to explain the impact on the downsized GM Employees and their families? Communities?How might this help in obtaining government support?

d)With the United States plans to impose high taxes on cars imported from Mexico, why GM keen on moving to Mexico?

e)Do you agree with the statement made by Unifor's national president Jerry Dias or interim Conservative leader Rona Ambrose on GMs decision to move to Mexico? Briefly explain your opinion.

1. Conclusion

Based on your research and learnings to date, what actions do you think the unions and/or government need to take to ensure that future erosion of 'higher paying' union jobs is mitigated?