By Joseph White
DETROIT (Reuters) - General Motors Co on Wednesday warned leaders of Canada's Unifor labor union that it will start to wind down production of its popular Chevrolet Equinox sport utility vehicle at an Ontario factory unless workers there call off a month-long strike.
The strike has been fueled by union opposition to the North American Free Trade Agreement.
Unifor leader Jerry Dias told Reuters on Wednesday that GM officials said they would ramp up production of the vehicle at two plants in Mexico that build the Equinox and a similar model, the GMC Terrain if the walkout is not called off.
"GM just told us today that they are going to ramp up production in Mexico," Unifor President Jerry Dias said by phone from Washington. "They have declared war on Canada."
GM has plants in the United States that are under-utilized, but retooling them to build the Equinox would be expensive.
GM plans to study how quickly key suppliers to the Ontario Equinox plant could move their operations to accommodate a shift in the vehicle's production, a person familiar with the discussions said on Wednesday.
GM's decision to build the Equinox and Terrain in Mexico is a major issue in the contract dispute between the automaker and the Canadian union.
Dias said he would not call off the strike.
"This is the big issue," Dias said of the strike. "Once we solve this, everything else will fall into place."
About 2,500 workers at a factory in Ingersoll, Ontario, walked off the job on Sept. 18 after GM rejected Unifor's call for the automaker to designate the factory, known as CAMI, as the lead production site for the Equinox in North America. The automaker invested $800 million to retool the plant for the new model.
The union also objected to GM's decision to lay off 600 CAMI workers as it phased out production of the last-generation GMC Terrain SUV, and launched production of new generation Terrain models along with the Equinox in Mexico.
The CAMI plant was projected to build about 210,000 vehicles in 2018, while two plants in Mexico together were projected to build about 150,000 vehicles next year, according to AutoForecast Solutions, a forecasting firm.
Unifor's Dias has blamed NAFTA for the job losses, complicating Canadian Prime Minister Justin Trudeau's effort to promote the benefits of open trade in response to U.S. President Donald Trump's criticism of the deal.
U.S., Canadian and Mexican negotiators began another round of talks this week to modernize the agreement.
The Equinox was the second best-selling model in the United States Chevrolet lineup in September, and GM had just 41 days worth of the vehicle in stock at the end of last month, according to Automotive News.
id by phone from Washington. "They have declared war on Canada."
(Reporting By Allison Lampert and Joseph White; Editing by Kim Coghill)