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'Conditional' contract language allowed for Nemak to close Windsor plant, says expert

A Western University professor says the language used in a 2016 contract extension between auto parts manufacturer Nemak and Unifor made it possible for the company to announce plans to close its west Windsor plant by mid-2020.

Michael Lynk, an associate professor at Western University's Faculty of Law, said the "conditional language" in the contract was one of the reasons an arbitrator ruled that the plant closure was not a violation of the collective agreement between the company and the union.

Nemak's Windsor plant makes aluminum engine blocks for some GM vehicles including light-duty diesel pickup trucks and the Corvette, parts known as CSS and Thelma and Louise respectively. Unable to meet their production targets or to secure new contracts, and anticipating multi-million-dollar losses in 2019 and beyond, Nemak announced in July 2019 its intention to shut down the plant by mid-2020.

By late August, workers believed that Nemak was moving some of its work to Mexico, in violation of the contract which states that Windsor would be the sole source of the CSS and Thelma and Louise engine blocks. The union and the workers also believed the contract guaranteed that work until at least 2022. Workers and Unifor began a blockade of the plant on Labour Day in protest.

When talks failed to find a solution to the impasse, Unifor and Nemak agreed to arbitration.

Arbitrator Norm Jesin concluded in a Nov. 29 decision that neither of the Unifor grievances, the plan to move some outstanding work to Mexico nor the 2022 guarantee, was valid.

... You'd need to have crystal clear language ... - Michael Lynk, Associate Professor, Western University Faculty of Law

According to Michael Lynk, Jesin "found that the language was not strong enough," in part because there was no formal promise made by Nemak to keep the Windsor Aluminum Plant open until 2022 — a date that Unifor leaders argued had been established in good faith.

Contrary to the arguments made by both workers and union leaders at the time of the blockade, there is no explicit mention in the collective agreement about promising to stay open until at least 2022.

In fact, the contract between Nemak and Unifor obtained by CBC News contains provisional statements. Among them, that Nemak would designate the Windsor Aluminum Plant as the sole source of two products, "based on the current volume projections." Jesin also ruled that because none of the work would be moved to Mexico until after the Windsor plant was closed, it was not a violation of the 'sole source' promise in the contract.

"To keep a plant open and continue to produce engine blocks — or tires or widgets or whatever they're producing — in the face of significant economic losses, and where there's no forthcoming order coming from the external customer, you'd need to have crystal clear language in your agreement that the company had to continue to operate and keep the plant open," said Lynk.

Read Norm Jesin's arbitration decision:

Thousands of projected orders never materialized

According to Jesin's decision, in a meeting between Nemak officials and then-president of Local 200 Chris Taylor at the company's office in Southfield, Michigan in Feb. 2016, Nemak presented its projections of thousands of orders for both engine blocks. That was seen by the union as a strong commitment to the future of the Windsor plant.

The company projected they would make 80,000 units of the diesel CSS block in 2018. They only made 500. In the same year, there were no orders to produce the Thelma and Louis parts. For 2019, Nemak projected 144,000 CSS blocks, but only received orders for 9,500. The company counted on 37,000 orders for Thelma and Louise in 2019, but only received 36 orders.

Those projections were not included in the language of the collective agreement.

'Have to make sure language is strong,' says Unifor leader

Unifor Local 200 vice president Tim Little said they were confident in the contract and disappointed with the arbitrator's decision. Little noted the language used in the contract is common to Unifor contracts and that they have approximately 1,100 collective agreements with various companies across Canada with similar language.

He said he stands by what was written in the contract and the union leadership felt it met all their needs, but he's leaving it up to Unifor at the national level to "make sure that our language is strong."

"I definitely believe our language would have to be written better and stronger," said Little.

Amy Dodge/CBC
Amy Dodge/CBC

Little said it was the first time in the history of Unifor Local 200 that the union used an arbitrator to settle a dispute, and it may have been a mistake.

"I don't believe I will go back through an arbitrator or risk anything in anybody's hands again," he said.

"Unifor has our ways of settling issues and I believe that we should stick to it."

At the time of the July announcement to close, Nemak employed approximately 170 unionized workers.